Italy is planning to tighten regulations on digital currencies in 2023 by expanding its tax laws to include cryptocurrency trading, according to budget documentation released on Dec. 1.
Included in its 2023 budget are plans to impose a 26% levy on profits larger than 2,000 euros ( $2,062) made on cryptocurrency trading, according to Bloomberg. Historically, digital currencies have had lower tax rates because they have been considered “foreign currency.”
If the proposed bill is signed into law, taxpayers will have the option to declare the value of their digital asset holdings as of Jan. 1 and pay a 14% tax. This is intended to incentivize Italians to declare their digital assets on their tax returns.
According to Tripe A data, 2.3% of the Italian population, which equates to about roughly 1.3 million people, own crypto assets. By July 2022, it was estimated that about 57% of crypto users were male, while 43% of users were female, with most of its users belonging to the 28–38 age group.
Related: IRS to summon users who don’t report and pay tax on crypto transactions
Italy appears to be following in Portugal’s footsteps. In October, Portugal — once known as a cryptocurrency tax haven — proposed a 28% tax on capital gains from cryptocurrencies held for less than a year.
In its 2023 state budget, the Portuguese government addressed the taxation of cryptocurrencies, which had been previously left untouched by tax authorities because digital assets were not recognized as legal tender.
Portugal intends to create a “broad and adequate” tax framework aimed at addressing the taxation and classification of cryptocurrencies. The proposed tax bill covers operations involving cryptocurrency mining and trading as well as capital gains.
