Italy will tax cryptocurrency earnings 26%

Capital gains tax of 26% will apply to any profits made from the trading of cryptocurrencies exceeding 2,000 euro ($2,062). Material related to the budget was made public December 1. It is alleged that Italy will increase the regulatory burden for digital currencies in 2023 by expanding its tax laws to cover the trade of cryptocurrency. Bloomberg reports that the country plans to add provisions in its budget for 2023 to tax earnings from trading cryptocurrencies worth more than 2,000 euro ($2,062).

Digital currencies are considered “foreign money” and therefore have historically been subject to lower taxes.

If the measure is approved and signed into law, taxpayers will have the option of reporting the value of digital assets as of January 1, and paying a 14% tax rate.

This is expected to encourage Italians, who are already digitally savvy, to declare their digital assets in their income tax filings.

Tripe A has provided statistics that show that 2.3% of Italy’s population is made up of crypto asset owners. This is approximately 1.3 million people.

It seems that Italy is following Portugal’s lead on this issue.

Portugal, which is a well-known cryptocurrency tax haven, proposed in October that 28% be imposed on capital gains derived cryptocurrencies that were held for less then a year.

In its fiscal year 2023 state budget, the Portuguese government addressed the taxation issue of cryptocurrencies. Tax authorities had ignored this issue in the past due to the fact digital assets weren’t recognized as legitimate forms for payment.

Portugal will develop a tax structure that is “widely applicable” and addresses issues related to taxation and categorization for cryptocurrencies.

Both the activity of mining and trading cryptocurrencies are included in the proposed tax law. Capital profits are not excluded.

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