The Italian government recently announced a plan to increase the capital gains tax on bitcoin and other cryptocurrencies from 26% to 42%. This proposal, part of broader fiscal measures to support election pledges and reduce Italy’s fiscal deficit, has raised concerns among cryptocurrency investors and industry leaders. The timing also aligns with the upcoming implementation of the European Union’s Markets in Crypto-Assets Regulation (MiCA), which aims to harmonize cryptocurrency rules across EU member states.
In response to criticism, sources told Bloomberg that Prime Minister Giorgia Meloni’s administration is considering amendments to the initial proposal. The League, a coalition partner, suggested lowering the tax increase to 28% instead of 42%, to prevent an investor exodus and maintain Italy’s position as a competitive crypto market.
“They realized they were going to lose even more wealthy people. And backtracked,” Spencer Hakimian, Founder of Tolou Capital Management on X, wrote in a Nov. 12 social media post on X.
Forza Italia, another coalition partner, has proposed eliminating the tax hike altogether while removing an exemption for gains below €2,000 ($2,120). Paolo Barelli of Forza Italia criticized the original plan, stating that the rationale behind the 42% rate is unclear to both average citizens and major investors, and called for a more balanced approach to protect the market.
In addition to the proposed rate adjustment, the League has suggested creating a permanent working group that includes digital asset firms and consumer advocates. This group would focus on improving investor education and strengthening Italy’s crypto ecosystem. Although the government is likely to adopt the League’s amendment, the final decision is pending, and further changes could be made.
Tax Foundation Europe highlights that other European countries have varying crypto tax rates. Germany and Spain impose taxes on crypto gains ranging from 26.4% to 28%, while France taxes gains at 34%. In contrast, Switzerland remains a tax haven for crypto investors with its 0% tax on crypto gains. Meanwhile, the United Kingdom applies Capital Gains Tax to crypto, with rates of 10% for basic-rate taxpayers and 20% for higher-rate taxpayers, according to Techopedia.
