Italian Parliament Approves 26% Tax On Crypto Gains In 2023 Budget

According to a new budget approved by parliament on Thursday, cryptocurrency dealers in Italy would face a 26% capital gains tax beginning in 2023.

According to Reuters, Italian Prime Minister Giorgia Meloni’s 2023 expansionary budget, which was produced in haste at the end of the year, includes 21 billion euros ($22.3 billion) in tax incentives to help firms and people dealing with the energy crisis.

In Italy, where crypto is mostly unregulated, the 387-page budget defines crypto assets as “a digital representation of value or rights that may be exchanged and held electronically, using a distributed ledger or comparable technologies.”

Italy and, more recently, Portugal have decided to put a capital-gains tax on cryptocurrency. This comes before the European Union’s Markets in Crypto Assets (MiCA) regulation, which will require crypto-service providers in the 27-member bloc to get licences and follow strict rules for running their businesses.

Gains from cryptocurrency trading are taxed at 26% if they surpass 2,000 euros every tax period. As an incentive to report cryptocurrency gains, the proposed measure would put a “substitute income tax” of 14% on the value of assets held on Jan. 1, 2023, instead of the price they were bought for.

The new laws say that losses from crypto investments can now be taken off of gains and carried forward. Investors, on the other hand, may want some extra clarification on what constitutes a taxable event since the paper also states that “the exchange of crypto assets with the same features and functionalities” does not constitute a “fiscal case.”

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