Italy is set to reduce the crypto tax rate to 28%, lowering it from a previously proposed 42%, to create a more favorable environment for crypto investors.
The Italian government is reportedly advancing a proposal to reduce the planned increase in crypto capital gains tax to 28%. This action is expected to bolster investor interest. The League, a critical component of Prime Minister Giorgia Meloni’s Coalition, has submitted an amendment limiting the proposed tax rate to 28%, as opposed to the 42% initially proposed in the October budget draft.
The proposed cryptocurrency tax in Italy has been reduced from 42% to 28% by the Italian government
According to sources, the League’s amendment is anticipated to receive the support of Prime Minister Giorgia Meloni’s administration. This development could indicate a transition to more favorable crypto policies in Italy. The initial proposal to increase the tax rate to 42% was part of a more comprehensive economic strategy designed to boost revenue for the 2025 budget.
Nevertheless, industry representatives hoped the high rate would render Italy more appealing for cryptocurrency-related activities and investments.
The League’s amendment proposes a compromise by setting the tax rate at 28%, which is still higher than the current 26% but significantly lower than the original plan of 42%. According to sources within the government, the proposal may still be subject to additional modifications before it is granted final approval.
The Coalition’s proposals are designed to address investor concerns
Forza Italia, an additional coalition party, has proposed distinct modifications in addition to the League’s amendment. This proposal aims to eliminate the tax exemption for gains below €2,000 and repeal the crypto tax increase. Both proposals indicate Italy’s governing Coalition’s readiness to reevaluate tax policies to attract and retain digital asset investments.
In addition, the League proposes establishing a permanent working group that includes representatives from consumer organizations and digital-asset firms. The goal is to increase transparency and offer investors resources to inform them about crypto tax.
Sources with knowledge of the situation indicate that the government may be inclined to incorporate the League’s amendment into the finalized budget even though no final decision has been reached.
Furthermore, finance Minister Giancarlo Giorgetti was willing to be flexible concerning the crypto tax. He recommended that Italy contemplate the possibility of differentiated taxation based on investment duration. If investors maintain digital assets for an extended duration, this proposal may provide them with advantageous circumstances.
The Ministry has recognized the necessity of a balanced approach considering the country’s competitiveness and revenue generation.
This tax adjustment was implemented while stabilizing its public finances according to the European Union’s guidelines. Globally, comparable tax policies have been implemented, yielding inconsistent outcomes. For instance, investors were apprehensive about India’s recent cryptocurrency tax, which resulted in many of them transitioning to foreign exchanges.
Detroit announced earlier this month that it intends to enable residents to pay taxes in cryptocurrency by mid-2025. To become a leader in blockchain applications within public services, Detroit has partnered with PayPal to facilitate secure transactions.
