Italy's government to drop plans to implement a 42% tax on crypto trading: report
Italian lawmakers respond to industry pressure by reconsidering significant tax hike on digital asset gains.
Key Takeaways
- Italy plans to reduce the proposed crypto capital gains tax from 42% due to industry pushback and political disagreement.
- An amendment has been proposed to limit the tax increase to 28% instead of the initially planned 42%.
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The Italian government will drop plans to increase the tax on crypto capital gains, Reuters reported Tuesday. The Treasury initially proposed raising the tax rate from 26% to 42% to support diverse socio-economic initiatives, but has faced intense lobbying from the industry and internal disagreements within the League ruling party.
League party lawmaker Giulio Centemero and Treasury Junior Minister Federico Freni said that the tax hike “will be significantly reduced during parliamentary work,” the report noted.
“No more prejudice about cryptocurrencies,” according to Centemero and Freni.
Lawmakers from the ruling coalition argued that a steep increase could drive crypto activities underground, negatively impacting both investors and the Italian economy. According to an earlier report from Bloomberg, instead of the proposed 42%, there is a push to cap the tax hike at 28%. There are also ongoing discussions about maintaining the current tax rate of 26%.
In tandem with scaling back plans for a tax increase on crypto trading, lawmakers from Italy’s ruling coalition are advocating for the implementation of progressive taxation and higher exemption thresholds to protect smaller investors.
The ruling coalition is exploring ways to create a supportive environment for crypto investments while addressing fiscal challenges. The revised tax proposal is part of the 2025 budget plan that must be approved by parliament by the end of December.
The crypto tax revision is among more than 300 “priority amendments” submitted by ruling coalition parties to modify Economy Minister Giancarlo Giorgetti’s budget. Giorgetti, who originally proposed the 42% rate, has expressed willingness to consider alternative taxation methods amid a party dispute.
Other nations, such as Russia and the Czech Republic, have begun taxing crypto trading. Russia has officially recognized digital currency as property and imposes a personal income tax of 13% to 15% on crypto sales, while exempting mining operations from a value-added tax.
Meanwhile, the Czech Republic has introduced reforms that will exempt individuals from capital gains tax on crypto assets held for over three years, aiming to promote a more favorable environment for digital asset investments.
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