Italy is planning to tighten regulations on digital currencies in 2023 by expanding its tax laws to include cryptocurrency trading, according to budget documentation released on Dec. 1.
As countries all over the world are mulling over imposing
stringent digital currency regulations, the Italian Parliament has introduced a
26% capital tax on crypto-asset trading as a part of its budget law for the
year 2023.
In fact, the budget describes cryptos as virtual,
electronically distributed ledger-based wealth that can be stored and
transferred.
The 26 percent tax rate applies to gains from crypto trading
if they exceed 2,000 euros, per tax period. The country has listed some
incentives for crypto investors to encourage them to declare their holdings.
Hence, the new bill also sets a "substitute income
tax" for investors at 14 percent of the value of the assets held as of 1
January 2023, instead of the cost at the time of purchase.
Similarly, losses arising from crypto investments, which are
higher than 2000 euros in a tax period, can be knocked off from profits and be
carried out to the next tax period.
Further, Italy has acknowledged the presence of the virtual
digital assets sector in the existing financial system.
Italy is home to about 1.3 million crypto holders, which is
nearly 2.3 percent of its population. As per reports, most of the crypto users
in the country were between the ages of 28 and 38, as of July 2022. The country
is making continuous efforts in favour of the crypto industry so as to
encourage people to set up shop and generate revenue.
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