Italy To Charge 26% Capital Gains Tax Of Crypto From 2023

According to foreign media reports on December 30th, the Italian Parliament approved a new budget for 2023, stipulating that crypto traders in Italy will pay a 26% capital gains tax from 2023. The new budget stipulates that the 26% rate applies to gains from crypto trading if they exceed 2,000 euros per tax period. As an incentive for declaring crypto profits, the new bill also sets a “substitute income tax” for investors at 14% of the value of the assets held as of January 1st, 2023, instead of the cost at the time of purchase.

At the same time, losses from crypto investments can be deducted from profits and be carried forward. Previously, crypto in Italy was largely unregulated. The 2023 budget document defines crypto assets as “a digital representation of value or rights, which can be transferred and stored electronically, using the technology of distributed ledger or similar technology.”

The move by Italy and Portugal, to impose a capital gains tax on crypto, comes ahead of the implementation of MiCA, the European Union’s crypto asset market regulation, which promises to provide a licensing framework and strict operational requirements for crypto asset service providers in the 27 member states.

Professionals suggest that because the new budget also stipulates that the exchange of crypto assets with the same characteristics and functions does not constitute a fiscal case, investors need to receive some additional guidance to understand the scope of taxable events.