According to a new budget that was approved by the Italian parliamentary finance committee on December 30th, cryptocurrency traders in Italy will be subject to a 26% capital gains tax starting this year.
According to Reuters, Italian Prime Minister Giorgia Meloni’s 2023 expansionary budget, which was completed in a rush before the end of last year, features 21 billion euros ($22.3 billion) in tax breaks to assist businesses and households facing the energy crisis.
The 387-page budget legalizes crypto assets in Italy and describes them as a digital representation of value or rights that may be transferred and maintained electronically using distributed ledger technology or similar technologies.
Italy’s move to introduce a capital-gains tax on crypto comes ahead of the implementation of the European Union’s Markets in Crypto Assets (MiCA) regulation that promises licensing frameworks and stringent operating requirements for crypto-service providers in the 27-member bloc.
The 26% rate applies to gains from crypto trading if they exceed 2,000 euros per tax period. As an incentive for declaring crypto profits, the new bill also sets a substitute income tax for investors at 14% of the value of the assets held as of January 1, 2023, instead of the cost at the time of purchase.
According to the new rules, losses from crypto investments can be deducted from profits and be carried forward. Investors, however, may require some additional guidance on what qualifies as a taxable event as the document also stated that the exchange between crypto assets having the same characteristics and functions doesn’t constitute a fiscal case.