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Italy’s Minister of Economy and Finance, Giancarlo Giorgetti, has defended the government’s proposal to raise the capital gains tax on cryptocurrencies, including Bitcoin, to 42%. Addressing concerns at a World Savings Day event on October 31, Giorgetti cited the “very high level of risk” associated with digital assets as a key reason for the increased tax rate.
Italy’s Council of Ministers recently approved a budget bill that would increase the withholding tax on cryptocurrency gains from the current 26% to 42%, marking a significant shift in the country’s approach to taxing digital assets. The proposed tax hike, however, still requires approval from Italian lawmakers. Among the critics, Giulio Centemero, a member of Italy’s Chamber of Deputies, argued on social media that the measure could be “counterproductive” and called for a more nuanced discussion on the issue.
The government anticipates that the raised tax rate will bring in approximately $18 million annually. This proposal follows Italy’s recent adjustment to crypto tax laws in 2023, when lawmakers raised the capital gains tax to 26% for crypto transactions exceeding 2,000 euros.
EU’s MiCA Regulations on the Horizon
As part of the European Union, Italy remains subject to the Markets in Crypto-Assets (MiCA) regulatory framework, which will take effect in December. MiCA aims to regulate stablecoin issuers, protect users on crypto exchanges, and mitigate market manipulation risks, though it doesn’t directly influence national tax policies on crypto assets. This framework could add another layer of oversight to Italy’s crypto space as the government moves forward with its proposed tax adjustments.
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