A new budget that was approved by the legislative body on Thursday states that Italian cryptocurrency traders would be subject to a 26% capital gains tax as of 2023.
In order to help firms and individuals dealing with the energy crisis, Italian Prime Minister Giorgia Meloni’s 2023 expansionary budget includes 21 billion euros ($22.3 billion) in tax reductions, according to Reuters.
In Italy, where cryptocurrencies are still mostly unregulated, the 387-page budget defines cryptocurrency assets as “a digital representation of value or rights, which may be exchanged and kept electronically, utilizing the technology of distributed ledger or analogous technologies.”
Prior to the Markets in Crypto Assets (MiCA) regulation’s implementation, which calls for the establishment of a licensing structure and stringent operational standards for the 27-member bloc’s crypto-service providers, a capital gains tax on cryptocurrencies has been proposed by Italy (and most recently, Portugal).
Gains from cryptocurrency trading are subject to a 26% rate if they surpass 2,000 euros every tax period. The new bill also establishes a “substitute income tax” for investors at 14% of the value of the assets held as of January 1, 2023, rather than the cost at the time of purchase as an incentive for disclosing cryptocurrency earnings.
Losses from crypto investments may now be deducted from profits and carried forward, according to the new legislation.
However, because the paper also states that “the exchange of crypto assets having the same characteristics and functionalities,” does not constitute a “fiscal case,” investors may need some extra clarification on what counts as a taxable event.
