EUROPE: Italian Government Raises Crypto Tax Amid EU Regulatory Changes

Italy plans to raise its capital gains tax on bitcoin to 42% amid growing adoption and as the EU prepares to implement its unified cryptocurrency regulations.

Italy is set to increase its capital gains tax on bitcoin from 26% to 42%, according to a recent report by Bloomberg. This decision comes as part of the Italian government’s efforts to fund election promises and reduce the country’s fiscal deficit.

The move coincides with the European Union’s preparation to implement its Markets in Crypto-Assets Regulation (MiCA), which aims to create a unified regulatory framework for cryptocurrencies across the EU.

Deputy Finance Minister Maurizio Leo emphasized the need for the tax increase during a conference call, citing the growing adoption of bitcoin as a key factor.

“The phenomenon is spreading,” Leo stated, highlighting the government’s recognition of cryptocurrency’s increasing prominence in the financial landscape.

Currently, Italy taxes capital gains from cryptocurrencies over €2,000 ($2,171) at 26%, classifying them as “miscellaneous income.”

The existing tax structure also applies to profits from converting crypto assets into euros, trading non-fungible tokens (NFTs) for cryptocurrencies, or using crypto assets to purchase goods or services.

Additionally, income from activities such as mining or NFT sales may incur income tax at rates between 23% and 43%.

The proposed tax hike is part of broader financial measures designed to stabilize Italy’s economy. Prime Minister Giorgia Meloni’s government is looking to balance its budget while fulfilling campaign promises, and the increased taxation on cryptocurrency gains is seen as one way to achieve this goal.

This development in Italy comes at a time when the European Union is preparing to roll out its MiCA framework. The EU-wide regulation aims to establish a comprehensive set of rules for the cryptocurrency market, focusing on transparency and consumer protection.

The implementation of MiCA is expected to create a more uniform regulatory environment across EU member states, potentially influencing how individual countries approach cryptocurrency taxation and regulation.

Despite the announcement of the tax hike, bitcoin’s value has continued to rise. At the time of the report, bitcoin was trading at $67,758, suggesting that investor sentiment remains strong in the face of regulatory pressures.

This resilience may indicate that the cryptocurrency market is maturing and becoming less reactive to individual regulatory changes.

The Italian government’s decision to align its crypto regulations with the EU’s MiCA framework demonstrates a move towards a more coordinated approach to cryptocurrency regulation within Europe.

This alignment could potentially simplify compliance for businesses operating across multiple EU countries and provide more clarity for investors.

13 June 2024

EU: Europe steps up its fight against fraud

European watchdogs have long been focusing on enforcement against corporate crime with a great focus on anti-corruption, economic sanctions and money laundering. In recent years, a new focus is emerging

Read More
29 April 2024

SINGAPORE: Singapore sees fewer new Chinese family offices after money-laundering crackdown

The influx of family offices handling money of Chinese origin has slowed in the wake of Singapore’s multibillion-dollar money-laundering scandal Tighter checks for new applicants are partly to blame

Read More
30 April 2024

AML: Binance founder Changpeng Zhao facing 3-year prison sentence for allowing money laundering

Prosecutors in the United States on Tuesday are asking a judge to hand Changpeng Zhao, the founder of Binance, the world’s largest cryptocurrency exchange, a three-year prison sentence for allowing

Read More
1 November 2024

EU: EU plan for digital income tax is shot down

European Union finance ministers failed to agree on a tax on digital income, despite a last-minute plan by Germany and France to save the proposal. The EU’s executive arm proposed a 3 percent

Read More