Italian lawmakers have proposed in the budget bill to encourage taxpayers to declare their crypto assets as of Jan. 1, 2023, and pay a 14% tax, according to Bloomberg. The move comes as a part of Italy’s plan to tighten digital assets regulation and increase taxes on crypto gains next year.
Italy’s New Budget Bill Proposes Extending Taxes on Crypto Gains to 26%
Italy’s new government led by Prime Minister Giorgia Meloni submitted a new budget bill that allows taxpayers to declare the value of their digital asset holdings as of Jan. 1, 2023, including a tax rate of 14%. According to the report, the newly proposed bill, which could see further amendments, includes “ disclosure obligations and extends stamp duty to cryptocurrencies.”
The proposal comes as Italy aims to stiffen the regulations of digital assets in the country in 2023. In one of the bill’s segments, the government also proposed extending a 26% levy on capital gains to crypto assets for profits of more than 2,000 euros ($2,062.3).
The move echoes a recently announced move by Portugal, one of the most crypto-friendly countries in Europe, to tax short-term profits on digital assets at 28%. According to data by Triple A, the new tax rates would affect 1.3 million people in Italy who have crypto holdings, translating to 2.3% of the country’s total population. Until now, Italy’s tax authorities have been treating digital assets as foreign currency, which are typically taxed at lower tax rates.
Global Regulators Move to Protect Investors After Several Crypto Project Implosions
Italy’s new taxation rules would come into effect amid a critical period for the digital assets space as it goes through one of its toughest periods on record. Crypto prices have been obliterated by macroeconomic conditions and more recently, the collapse of the crypto exchange giant FTX.
The FTX debacle, along with previous implosions of several other crypto platforms like Terraform Labs and Three Arrows Capital (3AC), has shaken investors’ confidence in the emerging asset class that hit unprecedented peaks just a year ago. As such, global regulators have been ramping up efforts to tighten the scrutiny of digital assets in a bid to protect investors.
The crash of Sam Bankman Fried’s empire has sent shockwaves through the industry, with investors pulling put over 220,000 BTC from exchanges in the week after the collapse. Bitcoin currently trades just above the $17,000 mark, down over 64% year-to-date.
This article originally appeared on The Tokenist
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