Italy plans to raise Bitcoin capital gains tax as part of a broader tax reform targeting the digital economy.
The Italian government is planning a significant increase in the capital gains tax on Bitcoin BTC $94 148 24h volatility: 0.1% Market cap: $1.87 T Vol. 24h: $27.23 B to generate funds to support public services. The tax hike is part of a broader plan included in the country’s 2025 budget proposal, which is currently awaiting parliamentary approval.
The country’s Deputy Economy Minister Maurizio Leo announced the proposed changes during a press conference on Wednesday, October 16. He stated that under the new budget, profits from BTC and other crypto investments would face a capital gains tax of 42%, significantly higher than the current rate of 26%.
Broader Tax Reforms in the Budget
Previously, crypto traders who earned over €2,000 were liable for a 26% tax. However, according to the announcement, the new change is designed to target high-value gains made by larger investors.
The move is part of the government’s effort to capture more revenue from the rapidly growing economy. If approved, the tax hike could have a notable impact on Italy’s crypto community, particularly for those profiting from trading digital assets.
While the tax primarily targets large-scale investors, the overall impact on Italy’s growing crypto market remains to be seen. If the proposal is passed, it could make the European nation one of the countries with the highest capital gains tax rates on digital assets, potentially discouraging some investors.
A Planned Reform
In addition to the proposed Bitcoin tax increase, the government also plans to overhaul the Digital Services Tax (DST).
The DST, originally introduced in 2019, currently applies to online companies that earn at least £750 million globally, with at least £5.5 million euros generated within Italy. The new proposal seeks to eliminate these thresholds, broadening the tax base to include more digital service providers operating in the country.
The move is part of the Italian government’s strategy to modernize its tax system, ensuring that the digital economy, including cryptocurrencies and tech companies, contributes fairly to public finances.
“On capital gains from Bitcoin, the withholding tax increases from 26% to 42%. On web tax revenues we are working to eliminate the ceiling of 750 million euros and 5 million in Italy, therefore we are eliminating the thresholds,” the Minister said.
The 2025 budget proposal, including the Bitcoin tax hike and DST reforms, has not yet been finalized. The Italian parliament is expected to vote on the bill before the end of the year. If the bill is approved, the new taxes will take effect in 2025.
Italy to Generate £3.5 Billion from Local Banks
The planned tax hike and changes to the DST come less than a day after the country revealed its plans to generate £3.5 billion from local banks and insurers to fund its proposed budget.
According to a Reuters report on Tuesday, the country’s Prime Minister Giorgia Meloni said the funds generated from these new tax measures would help support vulnerable communities and improve essential services across the country.
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