The Italian government is taxing cryptos at a punishing 26% starting this year after the Budget Law was passed in December.
Until recently cryptos were treated as foreign currency and were taxed accordingly, but the Meloni government is now taxing them like any income.
That’s for any gains above €2,000 a year and unlike some other jurisdictions, Italy will not impose taxation on crypto to crypto transactions.
“This legislation will be difficult to apply in practice and will open the doors to various disputes, with the risk of obtaining the opposite effect to that hoped for,” said Gianluigi Guida, general manager of Binance Italy as quoted by the Italian paper Corriere.
They point out it is not clear whether the €2,000 threshold applies cumulatively, or to each specific transaction.
Far more worrying from a global perspective is the uncompetitive landscape this creates for Italy.
Germany has no capital gain taxes for cryptos held more than a year while France is pushing pension reforms to lower business rates to compete globally, including for crypto businesses.
A 26% tax on crypto is the highest in the developed world, and risks making Italy a very unattractive proposition for potentially high growth innovative businesses.
It might even push wealthy Italians to leave the country as the punishing rate does not take into account the very high risk investors take in buying or holding crypto.
The €2,000 threshold in addition is far too small for such a very high rate, and makes the country uncompetitive at a time when it needs foreign investment.
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- Source: https://www.trustnodes.com/2023/05/02/italy-imposes-26-tax-on-crypto
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