Italy to raise capital gain tax on Bitcoin from 26 to 42

The Italian government plans to increase the capital gains tax on cryptocurrencies to 28%, according to Bloomberg, citing an unnamed source. Currently, Italian citizens are required to pay a 26% tax if their cryptocurrency gains exceed €2,000 (approximately $2,145).

This proposal comes from the conservative party Lega Nord, part of Prime Minister Giorgia Meloni’s coalition. The plan also includes establishing dedicated working groups and consumer associations to educate investors on the nuances of the cryptocurrency market.

Initially, Deputy Economy Minister Maurizio Leo proposed raising the tax to 42%, but this sparked backlash from the crypto community and was excluded from the final budget draft.

“A sharp tax hike could diminish Italy’s competitive edge compared to other EU countries offering more favorable tax regimes for cryptocurrency businesses,” Bloomberg noted.

Alternative Proposals

The Forza Italia party suggested a complete exemption from taxes on cryptocurrency profits. However, according to sources, the government is leaning toward the compromise solution proposed by Lega Nord.

In related news, Denmark has announced plans to tax unrealized cryptocurrency gains at a rate of 42%.