By George Ward
Cryptocurrency investors in Italy are liable to pay 26% capital tax on gains from transactions that exceed £2000 henceforth. This development follows the inclusion of the 26% capital tax law into the Italian 2023 national budget.
Italian Lawmakers Enact 26% Tax Law On Crypto Gains
On December 29th, the Italian authorities reportedly approved the crypto tax law proposed on December 1st as part of Italy’s 2023 budget. The proposal required crypto investors to remit 26% of their crypto transaction gains beginning from January 1st, 2023.
As incentives, the proposal allows taxpayers to pay a 3.5% tax on their undisclosed crypto holdings dated before December 31st, 2021. It also compels them to pay 0.5% on each additional holding per year.
However, there is an incentive in the proposal. Taxpayers can cancel their capital profits tax at 14% of the price of crypto assets held on January 1st, 2023, provided the price was lower than when the crypto was bought. Furthermore, the authorities revealed that taxpayers who lost up to £2000 in a tax period would be given a tax deduction.
Also, they have the authorities’ permission to pay the tax in the following tax period. The tax laws approved by the Italian authorities are clear on some vital taxable conditions.
Nonetheless, the tax law states that transactions between cryptocurrencies with the same characteristics and use cases are not eligible for tax payment. Consequently, due to the lack of clarity on how to pay tax on crypto assets, taxpayers would need guidance to comply with these new tax payment obligations.
Italy Emulates Portugal’s Cryptocurrency Tax Regulations
In addition, Italian authorities are reportedly emulating the crypto tax law enforced by Portugal as they establish clear regulations. In Portugal, crypto investors are required to pay tax on all capital profits earned from crypto assets transactions.
The country’s law task required 28% tax remission from January 2023. However, crypto enthusiasts believe that the strict crypto law might put the country at risk of losing its reputation as a crypto hub for crypto investors and traders.
Like Portugal, the Italian authorities also plan to tax-free crypto transactions. In addition, they contemplate taxing gains and commissions that crypto exchanges earn for providing their services.