Italy Crypto Tax : Government To Increase Capital Gain Tax From 26% to Massive 42%

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Italy has sent shockwaves to the crypto space by announcing its plan to raise tax on Bitcoin. This information was delivered during the conference for budget 2025. The Italian government has shared its plan to increase capital gain tax on Bitcoin. Let’s dive deeper to understand what exactly they are planning and when it will come to play.

Major Tax Increase on Crypto Gains

Applicable from January 2023, Italy had imposed a 26% capital gain tax on crypto assets. All gains over € 2,000 would attract a 26% tax. Not just this, but there is a 0.2% stamp duty on the value of crypto held with Italian intermediaries. Before 2023, the 26% capital gain tax only applied to a total value of crypto portfolio if it exceeded €51,645 for more than 7 consecutive days during a financial year.

With new tax rules, Italy is planning to raise the tax on capital gains from cryptocurrency from 26% to a hefty 42%. This is a massive jump and will apply to profits that exceed €2,000. The government sees this as an essential part of its fiscal reforms, which also target other sectors like banking and energy. The goal? To increase revenue in a time when inflation and economic uncertainties are looming.

How Will This Impact Investors?

Many believe that the new tax could discourage Italians from investing in cryptocurrencies. Some analysts suggest that investors might look for ways to avoid the tax, such as moving their investments offshore. However, government officials argue that the reforms are necessary to ensure fair taxation in a sector that has largely avoided regulation so far.

The Ministry of Finance estimates that this new policy could generate up to €4 billion, money that the country badly needs to stabilize its finances as the digital economy grows.

What’s Next?

This new tax is set to begin in January 2025. Investors and analysts alike are keeping a close eye on how this will affect the crypto market in Italy. Will other European countries follow Italy’s lead? With the European Union already working on regulations under the Markets in Crypto-Assets (MiCA) framework, Italy’s bold move may set a new standard for crypto taxation in Europe.