A 26% crypto tax on profits over 2,000 Euro has been approved by the Italian Parliament and implemented since the beginning of 2023, and the figure may soon increase to 42%.
Italy plans to increase Bitcoin income tax to 42%
During the press conference on the draft 2025 budget plan, which includes various methods planned to increase new revenue sources, Italian Deputy Minister of Economy Maurizio Leo plans to increase the capital gains tax on digital assets like Bitcoin from 26% to 42%.
"For capital gains from Bitcoin, we expect to increase the tax from 26% to 42%" - Italian Deputy Minister of Economy Maurizio Leo stated.
Capital gains are the profits earned from selling cryptocurrency assets at a higher price than the initial investment amount.
The 26% crypto tax on profits over 2,000 Euro has been approved by the Italian Parliament and implemented since the beginning of 2023 until now.
In this video, the Vice Minister of Economy Leo claims that in 2025, capital gains tax on Bitcoin will be raised from 26% to 42%.
— Lorenzo (@lorenzomartani) October 16, 2024
Time to leave Italy? 🇮🇹 pic.twitter.com/NKJU7i82Y1
The Italian government's decision to increase the Bitcoin tax is accompanied by a plan to raise around $4.35 billion, or 0.2% of GDP, in 2025. The country intends to increase revenue from new tax rules applied to both banks, insurance products, and gaming licenses.
The decision to increase the Bitcoin income tax rate to 42% suggests that Italy expects investment in this cryptocurrency to increase significantly in the coming period, as there is a possibility of further interest rate cuts from the FED to reach the 2% inflation target in the short term. Typically, interest rate cuts lead to investors being more willing to take on more risk as borrowing becomes easier.
The high tax rate may cause Italian investors to avoid Bitcoin, potentially hampering the growth of this asset class and making investors more cautious.
With a 42% capital gains tax on BTC, Italy is now among the countries with the highest crypto taxes in the world. Other countries that have already implemented, are implementing, or are preparing to implement capital gains taxes on crypto profits include Brazil and Thailand (both at 15%), South Korea (20%), India (30%), and Japan (expected 15 - 55%).
Compiled by Coin68
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