Italy plans to tighten regulations on digital currencies by expanding its tax law to include the buying and selling of cryptocurrencies by 2023, according to budget documentation released Dec. 1.
Included in its 2023 budget is a plan to impose a 26% tax on profits greater than 2,000 euros (USD 2,062.3) obtained from the purchase and sale of cryptocurrencies, according to Bloomberg. Before this proposal, digital currencies had lower tax rates because they were previously considered “foreign currency.”
In the bill, taxpayers will have the option to declare the value of their digital assets starting January 1 and pay a 14% tax. This is intended to incentivize holders of Italian digital assets to include their assets in their tax returns.
According to Tripe A data, 2.3% of the Italian population, which is equivalent to approximately 1.3 million people, owns crypto assets. In July 2022, it was estimated that around 57% of cryptocurrency users were male, while 43% were female, and most of its users were in the 28-38 age group.
Italy appears to be following in Portugal’s footsteps on the proposal to tax digital currencies. In October, Portugal, another popular tax haven for cryptocurrencies, proposed an i28% tax on capital gains of cryptocurrencies held for less than a year.
In the 2023 State budget, the Portuguese government addressed the taxation of cryptocurrencies, which until now had not been touched by the local tax authorities, since digital assets were not recognized as legal tender.
The Portuguese government intends to create a “broad and adequate” tax framework aimed at cryptocurrencies in terms of their taxation and classification. The proposed tax bill covers cryptocurrency mining and trading operations, as well as capital gains.
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