Starting in 2023, Italian crypto investors will be subject to a 26 percent capital gains tax. Under the new rule, cryptocurrency owners will have to be clear about their holdings and pay a 14% tax on their portfolios.
Bloomberg reports that beginning in 2023, Italy would tax cryptocurrency capital gains at a rate of 26%. Lawmakers in the nation have included the tax increase in their proposed budget for 2023. Only earnings in excess of €2,000 will be subject to the tax.
The tax rate for such earnings is 14%. Similar measures were introduced as part of India’s new tax rules earlier this year. Prior to the imposition of the higher tax rate, the Indian government gave its residents the opportunity to disclose their assets.
To now, cryptocurrency transactions have been subject to the much more favourable tax rates that apply to transactions in foreign currency. Investors will be frustrated by the new tax rate since it will reduce their capital gains. There are around 1.3 million Italians (or 2.3% of the total population) who are cryptocurrency holders.
Compared to other European countries, that number is low, but the government obviously intends to start enforcing the rules as soon as possible. Another nation that recently implemented a high tax rate on cryptocurrency is Portugal.
The Italian government is looking to enhance its oversight of the cryptocurrency sector by licensing cryptocurrency-related businesses.
Exchanges and other cryptocurrency providers are required to comply with anti-money laundering and counter-terrorism funding regulations as part of the registration process. There is a direct correlation between the impending implementation of MiCA rules by the European Union (EU) and the timing of these new regulations and registration requirements.