Italy's 2023 Budget Includes 26% Cryptocurrency Tax
The Italian parliament passed the 2023 budget legislation on December 29th that imposed a 26% capital tax on cryptocurrency profits over 2,000 Euros. In exchange for disclosing cryptocurrencies, they own for the previous year, citizens are offered a reduced tax rate.?
According to the newly approved legislation, cryptocurrency assets are defined as "digital representations of value or rights that can be transferred and stored using distributed ledger technology or similar technology."
A total of 1.3 million people in Italy hold cryptocurrency, or about 2.3% of the population. As of July 2022, the majority of cryptocurrency users are between the ages of 28 and 38. Attempts have been made by the Italian government to encourage the cryptocurrency industry and generate revenue by supporting it actively.
To encourage taxpayers to report their holdings, the new legislation allows taxpayers to declare the value of their digital asset holdings as of January 1st and pay a 14% tax. Tax amnesties are also included in the budget law. Moreover, businesses and households facing energy crises will receive 21 billion euros in tax breaks.
Cryptocurrency Taxation Around the World :
Italy is not the only country to impose taxes on cryptocurrency, as Portugal and India have also implemented similar measures.
In October 2022, Portugal, a nation known for supporting cryptocurrencies, announced that it would tax capital gains from cryptocurrencies that had been held for less than a year at 28%. Apart from Italy and Portugal, India also taxes cryptocurrency transactions at 30% capital gains taxes.
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