(Bloomberg) -- Italy is set to toughen regulation of digital assets and expand taxation on crypto trading from 2023, following similar moves by countries such as Portugal.
A provision in the country’s proposed 2023 budget plans to extend a 26% levy on capital gains to digital assets for profits larger than 2,000 euros ($2,062.3). Digital coins and tokens so far have been treated as foreign currency by Italy’s tax authorities, which implied a lower taxation.
The bill put forward by Prime Minister Giorgia Meloni’s government also gives taxpayers the option to declare the value of assets as of Jan. 1, 2023, paying a 14% tax. The aim is to encourage Italians to declare their holdings of digital assets in their tax returns. The proposed law, which may be amended in parliament, also includes disclosure obligations and extends stamp duty to cryptocurrencies.
Italy’s stricter stance comes after Portugal, one of Europe’s most crypto-friendly nations, in October unveiled its plan to tax short-term gains on digital assets at 28%. About 1.3 million people, or 2.3% of the population own crypto assets in Italy, according to Triple A data, well below the UK at 5% and France at 3.3%.
The new rules would come during a prolonged rout in digital asset prices that has precipitated the downfall of several large cryptocurrency platforms. The wave of bankruptcies and spectacular collapses -- including the recent crash of exchange FTX -- has led regulators globally to tighten their scrutiny of the nascent asset class.
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