Following Portugal’s lead, another European nation plans to impose stricter controls on cryptocurrencies and a heavier tax burden on crypto trade. Italy’s proposed budget for 2023 includes a measure that would impose a whopping 26% tax on crypto trading profits.
However, this tax bracket kicks in whenever crypto revenues exceed €2,000 ($2,062.3). The Italian tax authorities treated cryptocurrencies and tokens as foreign currency.
As of January 1, 2023, taxpayers in Italy must report the value of their digital assets and pay 14% tax. It is as according to the newly established government headed by Prime Minister Giorgia Meloni. This initiative aims to get Italian residents to report their ownership of digital assets and pay their taxes.
If the legislature approves the proposed changes, the stamp duty will be applied to cryptocurrency transactions, and there will be transparency requirements.
Italian and European Crypto Taxes
Portugal, perhaps is Europe’s most crypto-friendly country, has just revealed intentions to tax crypto gain. Thus the timing of the new development in Italy is apt. Short-term profits on digital assets will be taxed at a whopping 28% in Portugal, the country’s government said in October 2022.
Italy has a population of around 1.3 million, and 2.3% are now digital asset owners. Despite some progress, the United States lags behind countries like France (3.3% adoption) and the United Kingdom (5% adoption) regarding the widespread use of cryptocurrencies. However, the current crypto taxation system may discourage new entrants to the market.
However, the number of large cryptocurrency exchanges has recently begun expanding into Italy, citing the country’s promising economic environment. The Italian government approved the cryptocurrency exchange Binance’s request to establish a local presence in the nation earlier this year.
Recently, Italian authorities have greenlighted Nexo and Gemini, two cryptocurrency service providers.
Therefore, they would be able to provide for Italian crypto fans.