Bitrabo Editorial
Italy’s Deputy Economy Minister, Maurizio Leo, revealed today that the country is pondering a rise in capital gains tax on Bitcoin (BTC) and other cryptocurrencies from the current rate of 26% to 42%.
Italy Considers Increased Capital Gains Tax on Bitcoin
During a news conference on October 16, 2024, Leo indicated that the administration led by Giorgia Meloni is considering this notable uptick in withholding tax for capital gains associated with cryptocurrencies.
This proposed increase of 16% is included in Italy’s new budget bill, which was approved by the Council of Ministers on October 15, 2024. The aim is to create resources to benefit the youth, businesses, and families in Italy.
As of the 2023 tax year, any capital gains over $2,180 have already been taxed at 26%. This was part of the country’s initiative to clarify the tax treatment of digital assets with the introduction of specific laws for cryptocurrencies.
This shift in tax laws marks a departure from previously categorizing digital currencies as foreign currencies, which were levied with lower tax rates.
Leo also mentioned during the conference that Italy aims to reduce cash transactions in order to fight against money laundering and tax evasion.
Italy’s approach to digital assets is consistent with the wider global trend, as financial regulators are cautious about the potential risks of fraud and tax evasion associated with cryptocurrencies.
In June 2024, both the Bank of Italy and the Italian market regulator, Consob, united their efforts to enhance anti-money laundering (AML) measures specifically targeting illicit cryptocurrency usage.
This regulatory strategy aligns with actions taken by the European Union (EU), as other nations have been facing a rise in crypto-related crimes and have implemented stricter regulations to combat the misuse of digital assets.
European Regulations Lead to Exiting Exchanges
Despite the potential of digital assets for improved transaction transparency and efficiency, their misuse has raised alarms among financial regulators in Europe, leading to increased scrutiny on many exchanges.
One prominent exchange, Binance, has suffered from Europe’s stringent regulations. In June 2023, Germany’s financial regulator denied Binance’s application to offer Bitcoin and other custody services.
Additionally, the same month, Binance was accused of serious money laundering in France and was found to be providing unauthorized digital asset services to French residents.
Strict regulations have also forced Binance out of countries like the Netherlands and Austria.
Nonetheless, businesses continue to adopt cryptocurrencies. For example, in July 2024, the Italian luxury car manufacturer Ferrari announced it would accept Bitcoin, Ethereum (ETH), and USDC for payments from its European dealers. As of now, BTC is priced at $67,430, showing a slight decrease of 0.5% in the last 24 hours.