Italy Considers 26% Tax on Crypto Gains as Gemini and Binance Enters
Italy plans to join other European countries to tap into the increased shift of crypto businesses into the region by imposing a 26% digital trading tax.
The proposal is to introduce a 26% tax on capital gains in the 2023 budget. Italy is targeting to expand government revenue by taxing crypto traders when the capital gains realized exceed $2062.The proposal shifts from the current tax regime where crypto trading is treated conventionally within the foreign currency category.
Crypto Business Expand Operations in Europe
Italy’s taxation proposals coincide with the increased interest of global crypto businesses to expand operations in Europe. Besides Italy, Bitpanda secured a license to operate in Germany.
Also, Binance’s chief executive recently announced the successful registration of the crypto exchange platform in Spain, France, and Italy.
Gemini announced increasing its presence in Europe after adding five countries in November. The company’s address on November 30 declared securing regulatory approval to operate in Italy and Greece.
Taxation Policies in Europe
Italy’s plan to roll out a 26% tax on crypto gains echoes the decisions of other European governments. Its plan closely matches Portugal’s 28% tax, targeting profits realized from disposing digital assets.
However, Portugal imposes a tax on gains when the holding period of digital assets does not exceed a year. Contrastingly, crypto held for a period exceeding 1 year is tax-exempt.
The Italian government is rolling out a self-declaration system where investors voluntarily disclose their crypto holdings by January 1, 2023. The government is proposing 14% taxation on gains made by investors who disclosed their holdings.
Taxation Regimes Adopted in Other Countries
The desire for government oversight in the crypto industry operations has expanded to include taxation. However, the milestone attained to enforce oversight and taxation varies among different jurisdictions. Most jurisdictions desire to strike a balance between curbing tax evasion and promoting blockchain innovation.
UK authorities seized non-fungible tokens (NFTs), alleging to constitute proceeds of tax fraud. The early 2022 seizure serves as a warning to crypto asset holders and users intending to evade tax.
India has replicated the approach by imposing a blanket tax targeting all crypto-based transactions. The taxation plans have scared home-grown crypto companies promoting their departure from India.
In contrast, Costa Rica has indicated scrapping all taxes on crypto as part of the government’s devotion to attracting foreign direct investment and tech-based innovations.
Elsewhere, the US tax guidelines impose capital gains tax on all digital assets, including stablecoins, NFTs, and cryptocurrencies.
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