Italy Plans to Hike Bitcoin Capital Gains Taxes

The Italian government is planning to raise the capital gains tax on bitcoin from 26% to 42%, according to Vice Economy Minister Maurizio Leo. Reuters specifies the increase will apply to all cryptocurrencies.

What's the scoop?

• Current Taxation: Since the 2023 tax year, capital gains above €2K have been taxed at 26%.
• Focus on Revenue Generation: The tax increase is intended to generate resources for supporting families, youth, and businesses.
• Cash Usage Crackdown: Italy also plans to implement measures to combat tax evasion through limits on cash transactions.

Bankless Take:

Italy's decision to raise capital gains tax on Bitcoin mirrors global trends where other countries, like the UK, are considering similar tax hikes on digital assets, potentially increasing them from 20% to 39%. While these measures aim to bolster public funds, they will likely discourage investors and incite capital flight to friendlier jurisdictions. It will be interesting to see how crypto’s presence in the EU progresses, considering the tension between new, well-received regulations like MiCA and these updated taxation efforts, which probably won’t be as welcomed…