Italy is tightening its regulations on digital currencies in 2023 by escalating its tax laws to include cryptocurrency trading.
Included in its 2023 budget are plans to impose a 26% levy on profits larger than 2,000 euros made on cryptocurrency trading. Historically, digital currencies have had lower tax rates because they have been considered foreign currency.
If the proposed bill is signed into law, taxpayers will have the option to declare the value of their digital asset holdings and pay a 14% tax. This is intended to incentivize Italians to declare their digital assets on their tax returns.
Italy seems to be following in Portugal’s footsteps as Portugal once known as a cryptocurrency tax haven proposed a 28% tax on capital gains from cryptocurrencies held for less than a year.
In its 2023 state budget, the Portuguese government addressed the taxation of cryptocurrencies, which had been previously left untouched by tax authorities because digital assets were not recognized as legal tender.
