According to Cryptoslate’s reporting, on December 30, the Italian Parliament will begin collecting a 26% tax on gains from cryptocurrency trading of more than €2,000.
According to Cryptoslate, this new rule will be included in Italy’s budget for 2023. The budget defines a cryptocurrency as “a digital asset that can be kept and transferred in the same way as any other commodity,” a technical description of a distributed ledger.
The Italian Parliament has Passed a Cryptocurrency Capital Gains Tax.
On December 29, the Italian Parliament approved a new cryptocurrency tax as part of the budget plan for 2023. Senators accepted a text submitted on December 24 that allowed a 26% aliquot for bitcoin gains above 2,000 euros (about $2,060) for a tax term.
Since December 1, when the draft budget law came out, a capital gains tax on cryptocurrency has been proposed. The approved document offers a variety of incentives for taxpayers to reveal their cryptocurrency holdings, including an amnesty on realized gains, a 3.5% “substitute tax,” and a 0.5% fine for each year.
In addition, the budget law provides for the cancellation of capital gains tax at a rate of 14% of the price of bitcoin kept on January 1, 2023, which is much lower than the price paid for cryptocurrencies.
Similarly, bitcoin losses over 2000 euros in a tax period will be considered tax deductions and can be carried forward to subsequent tax seasons.
Italy’s New Cryptocurrency Tax Law Is Hard to Interpret:
Most of the most critical scenarios in which cryptocurrency will be subject to taxation are explicitly laid out in the law. The legislation states that exchanging crypto assets with the same characteristics and functionalities is not taxable. Because these assets with similar qualities and functions have not been established in the body of legislation, users will want advice when presenting tax statements.
Italy is following in Portugal’s footsteps by enacting legislation regulating cryptocurrency exchanges but not the core technology. Speaking of which, the Portuguese government approved the “Digital Transitional Action Plan” for deployment on April 21, 2020. The act created what is now called “Free Zones” to test cryptographic technologies. These zones established a flexible regulatory environment for testing, including on-site testing in real-life scenarios, and provided help from regulatory agencies.
These zones also give testing opportunities. As a result, the program focuses on lessening the load of regulatory and legal requirements that cryptocurrency businesses must contend with as they develop and test out new technologies.
Following the same approaches, the European nation’s budget law for 2023 includes a comparable capital gains tax of 28%, which might threaten the nation’s standing as a sanctuary for cryptocurrency enterprises and holders.
This plan, made public in October, also considers taxing the charges charged by cryptocurrency exchanges and other crypto operations for enabling cryptocurrency transactions and the free transfer of cryptocurrency itself.
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