The Government of Italy has approved a new 26% capital gains tax on cryptocurrencies as part of its 2023 budget legislation.
Italy’s Senate approved the European country’s 2023 budget, which includes the capital gains on crypto assets valued at more than 2,000 euros ($2,107 U.S.).
The budget legislation defines cryptocurrency assets as “a digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.”
Previously, cryptocurrencies were treated as foreign currencies in Italy and were subjected to lower taxes than other investments and assets.
The new legislation also enables taxpayers to declare the value of their digital assets as of January 1 and pay a 14% tax, an incentive that aims to encourage Italians to declare their cryptocurrency holdings.
Italy‘s new capital gains tax follows the approval of the “Markets in Crypto Assets” (MiCA) bill passed by the European Union on October 10, 2022.
That legislation establishes a consistent regulatory framework for cryptocurrencies among the 27 member countries of the European Union and comes into effect in 2024.
