Digital Assets to Get Taxed in Italy

The rules governing the disclosure of and taxation of digital assets appear to be expanding and becoming more stringent in Rome. The adjustment is most likely to occur in conjunction with Italy’s 2023 budget, which is anticipated to target gains from cryptocurrency trading and wealth.

According to Bloomberg, a proposal in the budget by the right-wing administration led by Prime Minister Giorgia Meloni would extend a 26% tax on capital gains on any crypto asset held above 2,000 euros ($2,080).

The ruling coalition also gives taxpayers the choice to declare the value of their digital assets as of January 1, 2023, and be subject to a 14% tax rate. The move is believed to be aimed at encouraging Italian taxpayers to report their assets on their tax filings.

Digital Assets Considered Foreign Currency Under Italian Law

Digital currencies and tokens are considered foreign currency in Italy under the present tax laws, which results in a lower tax rate. Additionally, the draft law adds transparency requirements and expands the application of stamp duty to cryptocurrencies. That said, the possibility of an amendment in parliament remains open.

According to the research, which cites Triple A data, around 1.3 million Italians (2.3% of the nation’s population) are crypto asset owners. This is notably lower than the 3.3% in neighboring France and 5% in the United Kingdom.

Meloni, the president of the far-right Brothers of Italy party and the first woman to run Italy’s executive branch in Rome, has advocated for reduced taxes in the past.

Her government is now taking a harder position on cryptocurrency, following in the footsteps of Portugal, one of the EU’s most pro-crypto member states, which declared in October that it intended to tax short-term cryptocurrency earnings at a rate of 28% starting in 2019. Additionally, it coincides with a worldwide tightening of rules as a result of a spate of bankruptcy filings in the cryptocurrency sector, including the most recent failure of the crypto exchange FTX.