Capital gains tax on cryptocurrencies approved in Italy at 26%

Key points: 

• Italian Senate approved its 2023 budget, which included an increase in taxes on cryptocurrency investors.
• The approved legislation defines crypto assets as “digital representations of value or rights that can be transferred and stored electronically using distributed ledger technology or similar technology.” 
• The Italian legislation follows the adoption on Oct. 10 of the Markets in Cryptoassets Act (MiCA), which creates a unified regulatory framework for cryptocurrencies across the 27 EU member states.
• MiCA is expected to come into force in 2024.

A few days before the end of the year, on December 29, 2022, the Italian Senate approved its 2023 budget, which included an increase in taxes on cryptocurrency investors - a levy on capital gains on crypto assets above 2,000 euros (approximately 2,131 USD at the time of publication).

The approved legislation defines crypto assets as “digital representations of value or rights that can be transferred and stored electronically using distributed ledger technology or similar technology.” Previously, crypto assets were considered foreign currencies in the country, subject to lower taxes.

The bill also stipulates that taxpayers will be able to declare the value of their digital asset holdings starting Jan. 1 and pay a 14% tax, aimed at encouraging Italians to invest their digital assets in Incentives for specific assets.

Other changes introduced in the budget law include a tax amnesty to reduce penalties for non-payment of taxes, tax incentives for job creation, and lower retirement ages. It also includes 21 billion euros ($22.4 billion) in tax breaks for businesses and households battling the energy crisis.

Giorgia Meloni, the first woman to be Italy's prime minister, received broad support for her bill from the legislature, despite promising dramatic tax cuts when she was elected in September.

Measures taken by the Italian government to reduce natural gas consumption across the country include leaving buildings without central heating for more than 15 days and urging people to turn down heating by 1 degree for an extra hour a day, local media reported. winter.

The Italian legislation follows the adoption on Oct. 10 of the Markets in Cryptoassets Act (MiCA), which creates a unified regulatory framework for cryptocurrencies across the 27 EU member states. MiCA is expected to come into force in 2024.