Italy Proposes Significant Increase In Crypto Capital Gains Tax

According to Cointelegraph, Giancarlo Giorgetti, the Italian Minister of Economy and Finance, has defended a proposal to raise the capital gains tax on cryptocurrencies, including Bitcoin, to 42%. Speaking at a World Savings Day event on October 31, Giorgetti highlighted the high risk associated with digital assets, justifying the government's decision to amend the capital gains tax. The Italian Council of Ministers has approved a budget bill to increase the withholding tax on Bitcoin from 26% to 42%. However, this proposed tax hike is still pending review and approval by Italian lawmakers before it can be implemented. Giulio Centemero, a member of Italy’s Chamber of Deputies, expressed concerns on October 16, stating that taxing cryptocurrencies could be counterproductive and called for further discussions among lawmakers. The proposed budget aims to generate approximately $18 million annually by raising the crypto tax rate. In 2023, lawmakers had already increased the capital gains tax on crypto trading exceeding 2,000 euros to 26% as part of a budget plan. As a member of the European Union, Italy will still adhere to the Markets in Crypto-Assets (MiCA) framework, which is set to take effect for crypto asset service providers in December. While MiCA will not impact a government's ability to tax crypto, it aims to regulate stablecoin issuers, protect exchange users, and address market manipulation.