FameEX Hot Topics | Italy Increases Capital Gains Tax on Bitcoin Ahead of EU MiCA Regulations

Italy is set to increase its capital gains tax on Bitcoin from 26% to 42% as part of an effort to fund election promises and address the fiscal deficit. Prime Minister Giorgia Meloni’s government cites the growing adoption of Bitcoin as a key reason for this decision, Bloomberg reported. This move comes as the European Union prepares to roll out its Markets in Crypto-Assets Regulation (MiCA), aimed at creating standardized cryptocurrency regulations across member states.

During a conference call, Deputy Finance Minister Maurizio Leo emphasized the need for the tax increase, noting that Bitcoin usage is expanding. He described the rising adoption as a "spreading phenomenon" and underscored that the tax hike is part of broader measures to stabilize the country's economy. Italy's approach aligns with the EU’s MiCA framework, which focuses on transparency and consumer protection within the digital asset market.

The planned tax increase is designed to address previous challenges faced by countries attempting to tax digital assets. In many instances, high taxes have driven investors to offshore platforms to avoid the levy. By coordinating its crypto regulations with the upcoming EU MiCA guidelines, Italy aims to create a more structured and compliant environment for cryptocurrency investments.

Currently, Italy taxes capital gains on cryptocurrencies exceeding €2,000 ($2,171) at 26%, classifying these as "miscellaneous income." Additionally, earnings from activities such as mining and non-fungible token (NFT) sales can incur income tax rates ranging from 23% to 43%. The existing 26% capital gains tax applies to profits made by converting crypto assets into euros, trading NFTs for cryptocurrencies, or using digital assets for purchases.

Despite the news of the upcoming tax increase, Bitcoin’s price continued to rise, reflecting strong investor sentiment. The resilience in Bitcoin's value suggests that the market remains robust, even amid tighter regulations. Italy’s tax adjustment marks a significant step in aligning its digital asset policies with broader European standards, setting the stage for greater integration within the EU’s regulatory framework.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.