As part of its budget law 2023, the Italian parliament approved a cryptocurrency tax on Dec. 29. Senators approved a Dec. 24 document that approved 26% aliquots for cryptocurrency gains exceeding 2,000 euros (approx. $2,060 during a tax period
Since Dec 1, the draft of the budget law was presented, the capital gains tax for cryptocurrency had been suggested. The approved document offers a number of incentives to taxpayers to declare their crypto holdings. These include an amnesty for gains, a substitute tax of 3.5% and a 0.5% fine each year.
A second incentive in the budget law is that taxpayers can cancel their capital gains taxes at 14% of the price for cryptocurrency on January 1, 2023. This would be significantly less than the price paid when the cryptocurrency first was purchased.
The same applies to cryptocurrency losses exceeding 2000 euros during a tax period. These will be counted as tax deductions that can be carried forward to the next tax periods.
It’s possible to interpret Italy’s new cryptocurrency tax law
Most of the circumstances under which cryptocurrencies are taxed are clearly stated in the law. The law does mention that an exchange of crypto assets with the same functions and characteristics is not a taxable event. Users will need to be guided on how to present their tax statements as the law does not define the characteristics or functions of these assets.
Italy is following Portugal’s lead in cryptocurrency regulation. The European country has included a similar capital gain tax at 28% in its budget law for 2023. This could put in jeopardy the country’s status as a haven country for holders and cryptocurrency companies.
The October proposal also includes taxes on free cryptocurrency transfers and commissions on crypto exchanges and other operations that facilitate cryptocurrency transactions.