Profits from cryptocurrency trading that exceed €2,000 ($2,062) will be subject to capital gains tax at a rate of 26%. According to budget-related material made public on December 1, Italy intends to increase the regulatory burden imposed on digital currencies in 2023 by expanding the scope of its tax laws to include cryptocurrency trading. According to Bloomberg, the country is proposing to include in its 2023 budget provisions to charge a 26% tax on profits made from cryptocurrency trading that exceed 2,000 euros ($2,062).
Due to the fact that digital currencies have traditionally been considered “foreign money”, they have traditionally been subject to lower tax rates.
Taxpayers will have the option to report the value of their digital asset holdings starting January 1 and pay a 14% tax rate if the measure now being considered is passed and becomes law.
This is expected to encourage Italians to include a statement of their digital assets on their income tax returns.
According to statistics provided by Tripe A, 2.3% of Italy’s population is made up of crypto asset owners, which is equivalent to around 1.3 million people.
It seems that Italy is taking the lead from Portugal in this matter.
In October, Portugal, once known as a cryptocurrency tax haven, submitted a proposal to impose a 28% tax on capital gains derived from cryptocurrencies that had been held for less than a year.
The Portuguese government addressed the issue of cryptocurrency taxation in its state budget for fiscal year 2023. This issue had previously been ignored by tax authorities due to the fact that digital assets were not recognized as legitimate forms of payment.
To address issues related to the taxation and categorization of cryptocurrencies, Portugal plans to develop a tax structure that has a “broad and appropriate” scope.
Cryptocurrency mining activity and trading are included in the scope of the proposed tax law, in addition to capital gains.