The 26% tax will be applied to crypto gains above 2000€.
The Senate of the Republic of Italy, the upper house of the bicameral Italian Parliament, has imposed a 26% tax on crypto capital gains.
It is worth noting that, on December 29th, the Italian Senate approved its budget for 2023.
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According to the budget summary, the 26% tax will be applied to cryptocurrency gains above 2,000 euros (around $2,130).
Nevertheless, the Italian government has introduced incentives encouraging taxpayers to declare their crypto holdings. Starting January 1st, taxpayers can disclose their crypto holdings and pay 14% tax.
The Italian government proposed an amnesty on gains achieved by paying a “substitute tax” of 3.5%, with 0.5% added as a fine for each year.
On top of that, the Italian Parliament believes that crypto losses higher than 2000€ recorded during the tax year could be carried out until the next tax period.
In Italian legalization, the government describes crypto assets as “a digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.” It is worth noting that previously, cryptocurrencies were considered as foreign currencies and applicable to lower taxes.
The capital gains tax was initially introduced at the beginning of December as the Italian Parliament was laying out its budget for 2023.
Another Western European country, Portugal, has also shared plans to impose similar taxes on crypto gains. In its 2023 budget draft, the Portuguese government planned to apply a 28% tax. Nevertheless, the country’s government claimed that tax applies to investors' capital gains made within a year, with the exception of gains acquired after a year of holding cryptocurrency.
Recently, Italy's Organismo Agenti E Mediatori (OAM) registered cryptocurrency exchange Gemini as a Virtual Currency Operator.
