[Italy] 26% capital gains tax on crypto earnings approved

On December 29, Italy’s parliament approved a new tax on cryptocurrencies as part of its budget for 2023. The budget document included a 26 per cent rate for cryptocurrency earnings above 2,000 euros during a tax period, Up Jobs News reports.

The capital gains tax for cryptocurrencies was proposed on December 1, when the budget bill was introduced. The approved document includes a series of incentives for taxpayers to declare their cryptocurrency holdings, proposing an amnesty on the profits obtained, paying a “substitute tax” of 3.5 per cent and adding a 0.5 per cent penalty for each year.

Another incentive included in the budget law will reportedly allow taxpayers to write off their capital gains tax at 14 per cent of the price of the cryptocurrency they had on January 1, 2023, which would be significantly lower than the price paid when the cryptocurrency was purchased.

In the same way, under the new legislation, cryptocurrency losses greater than 2,000 euros in a tax period will count as tax deductions and may be applied to the following tax periods.

Room for interpretation

The law is clear about most of the key circumstances in which cryptocurrencies will be taxed. However, it reportedly states that “the exchange between crypto assets that have the same characteristics and functions does not constitute a taxable event.” This means that users must receive guidance to file their tax returns because these assets that have the same characteristics and functions have not been defined in the body of the law.

Italy does not have comprehensive cryptocurrency regulation but it is seemingly following in Portugal’s footsteps. The European country included a similar capital gains tax at a rate of 28 per cent as part of its 2023 budget law. A decision that some reportedly believe could jeopardise the country’s status as a haven for companies and cryptocurrency holders.

This proposal, announced in October, also encompasses taxes on the free transfer of cryptocurrencies and on the fees charged by cryptocurrency exchanges and other crypto operations for facilitating cryptocurrency transactions.

Source: Up Jobs News

On December 29, Italy’s parliament approved a new tax on cryptocurrencies as part of its budget for 2023. The budget document included a 26 per cent rate for cryptocurrency earnings above 2,000 euros during a tax period, Up Jobs News reports.

The capital gains tax for cryptocurrencies was proposed on December 1, when the budget bill was introduced. The approved document includes a series of incentives for taxpayers to declare their cryptocurrency holdings, proposing an amnesty on the profits obtained, paying a “substitute tax” of 3.5 per cent and adding a 0.5 per cent penalty for each year.

Another incentive included in the budget law will reportedly allow taxpayers to write off their capital gains tax at 14 per cent of the price of the cryptocurrency they had on January 1, 2023, which would be significantly lower than the price paid when the cryptocurrency was purchased.

In the same way, under the new legislation, cryptocurrency losses greater than 2,000 euros in a tax period will count as tax deductions and may be applied to the following tax periods.

Room for interpretation

The law is clear about most of the key circumstances in which cryptocurrencies will be taxed. However, it reportedly states that “the exchange between crypto assets that have the same characteristics and functions does not constitute a taxable event.” This means that users must receive guidance to file their tax returns because these assets that have the same characteristics and functions have not been defined in the body of the law.

Italy does not have comprehensive cryptocurrency regulation but it is seemingly following in Portugal’s footsteps. The European country included a similar capital gains tax at a rate of 28 per cent as part of its 2023 budget law. A decision that some reportedly believe could jeopardise the country’s status as a haven for companies and cryptocurrency holders.

This proposal, announced in October, also encompasses taxes on the free transfer of cryptocurrencies and on the fees charged by cryptocurrency exchanges and other crypto operations for facilitating cryptocurrency transactions.

Source: Up Jobs News