Italy is planning to tighten regulation around cryptocurrencies by taxing capital gains beginning in 2023. According to the European country’s proposed budget for next year, all digital currency profits above £2,000 will be subject to a 26% tax levy.
The provisions also declared that Italian investors who declare their digital asset holding by 2023 will enjoy a lower tax rate of 14%. Prime Minister Giorgia Meloni believes lowering the rate will encourage more citizens to declare their crypto asset holdings.
The new law will increase transparency and help tighten regulation
Besides taxing cryptocurrency profits, the proposed law also features digital assets stamp duty and disclosure obligations.
Despite the new bill being in its early stages and could be amended anytime, lawmakers aim to increase transparency and transparency requirements to help build better regulation around digital assets.
Data shows nearly 2.3% of Italy’s population — roughly 1.3 million people — holds some sort of cryptocurrency.
Nonetheless, financial watchdogs across the world are still experimenting with various ways of enhancing crypto regulations.
For example, Italy’s new bill follows Portugal’s plan to impose a 28% tax levy on short-term crypto profits. In fact, Portugal has positioned itself as one of the most crypto-friendly countries in Europe.