Italy’s 2023 Budget was Approved with a 26% Tax on Crypto Earnings

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Key takeaways:

  • The Italian Parliament decided to impose a 26% tax on all cryptocurrency asset revenues.
  • Loss protections for crypto investments are included in the paper. Investments in cryptocurrencies will always generate profits, which will be subtracted from any losses.

The Italian Parliament has agreed to implement a 26% tax on cryptocurrency-related revenues of over €2,000.

The Italian budget for 2023 includes the new laws. The term “cryptocurrency” refers to a digital representation of value that may be electronically stored and transferred utilizing a distributed ledger.

Cryptocurrencies are not considered to be a fiscal case, it says. However, it is noteworthy that the paper includes protections for losses on cryptocurrency investments.

Profits from investments focused on cryptocurrencies will always be deducted from any losses. Additionally, the budget requests tax reductions totaling €21 billion to aid the nation’s struggling people and enterprises.

Prime Minister Giorgia Meloni’s administration in Italy also wants to encourage crypto-asset owners to disclose their holdings.

Holders that comply will be allowed to pay a 14% tax on their holdings as of January 2023 instead of the purchase price, which is intended to incentivize compliance.

Giorgia Meloni, the prime minister, asserts that the only way the nation can develop into a center for cryptocurrency is by having a solid set of laws that can safeguard investors.

The government has expressed a willingness to cooperate with cryptocurrency trading firms to accomplish this goal. This enabled businesses like Binance, Gemini, and Nexo to win clearance for registration in the nation.

The new legal improvements are a significant step forward for the country’s standing in the cryptocurrency industry, notwithstanding the levy against cryptocurrency that affects people who profit from digital assets.

Trading transactions that total more than 2,000 euros each tax period are subject to a 26% cryptocurrency gain tax. Therefore, the government is encouraging cryptocurrency merchants to declare.

In addition, the proposed legislation establishes for investors a “substitute income tax” of 14% of the value of assets held as of January 1, 2023, as opposed to the cost at the time the item was acquired.

Beyond Italy, other European countries have acted to impose higher taxes on cryptocurrency gains. Portugal just enacted a 28% tax on all bitcoin income. The Portuguese government also plans to tax-free cryptocurrencies, including airdrops, at a rate of 10% and cryptocurrency broker commissions at a rate of 4%.

The Portuguese government addressed the taxation of cryptocurrencies in its 2023 state budget, which tax officials had previously ignored since digital assets were not recognized as legal cash.

Portugal wants to handle the taxes and categorization of cryptocurrencies by establishing a “broad and adequate” tax system.

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