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Italy is preparing to take a bold step in its crypto tax policies. The Italian government plans to increase the capital gains tax on Bitcoin (BTC) and other cryptocurrencies. During a recent press conference, Vice Economy Minister Maurizio Leo announced that capital gains tax would be increased to 42%.
He shared that this drastic change is part of the country’s budget plans for 2025, which aim to boost state resources.
Capital Gains Tax Surge for Crypto Investors
Capital gains on digital assets exceeding €2,000 have been taxed at 26% since the 2023 tax year following the introduction of new rules. Before that, cryptocurrency was treated as foreign currency with much lower tax rates.
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Since 2022, Italy has taxed crypto capital gains over €2,000 at a rate of 26%. Prior to that, cryptocurrency was treated as foreign currency with much lower tax rates. The new plan drastically increases the tax to 42%, setting a higher bar for crypto investors.
Leo detailed that this new development, approved by the Council of Ministers, is designed to raise funds to bolster crucial societal initiatives. This includes family support and youth initiatives alongside business incentives. This shift positions Italy as one of the countries with the highest tax rates on digital assets.
Alongside the crypto tax increase, Leo revealed plans to crack down on cash usage to curb tax evasion. This further demonstrates Italy’s broader focus on tightening financial regulations.
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Notably, the South African government has recently decided to crack down on tax evasion in the country. The South African Revenue Service (SARS) revealed that many crypto users in the country still need to declare their digital assets in tax filings.
No General Tax Increases, Says PM Meloni
Italy’s Prime Minister Giorgia Meloni quickly clarified that the new tax measures would not affect most Italian citizens. She assured that there would be no broad new taxes for citizens.
However, the crypto-focused tax policy is an exception. Meloni highlighted that the government would still cut taxes for workers and allocate €3.5 billion from banks and insurance companies to healthcare and vulnerable citizens. Italy’s bold crypto taxation stance sends waves across the global financial landscape.
Global Trend Toward Higher Crypto Taxes
Italy’s tax move mirrors similar developments in other countries. This crypto tax hike follows reports of a similar proposal in the UK. Chancellor Rachel Reeves is considering raising capital gains taxes on virtual assets from 20% to 39%. Countries increasingly seek to capitalize on the growing digital asset space to secure additional revenue.
In contrast to this trend, Japan is the odd one out. Japanese regulators have recently pushed for a lower crypto tax in the 2025 overhaul.
