Cryptocurrency investors in Italy are going to feel the regulations tightening on them from the authorities’ end. The Italian government has a new idea about making changes to the crypto regulations.
The Italian government is now going with the idea of implementing taxes on the profits generated from cryptocurrencies.
Italy to Tighten Crypto Regulations
Despite the downfall of the overall cryptocurrency industry since the beginning of 2022, authorities from around the world are implementing strict regulations on crypto.
Italy is among the countries that are now planning to implement taxes on holding cryptocurrencies and profiting from them.
If the Italian authorities want to generate taxes from crypto activities, then they need to have a strict regulatory framework about how the crypto is handled.
As the authorities are determined, they are planning to introduce amendments to the regulations for cryptocurrencies. The taxation on crypto assets is of the utmost priority.
However, prior to implementing strict taxes on cryptocurrencies, there is one thing that has to be made clear. The country needs to have clear visibility about the inflow of cryptocurrencies on its soil.
For this purpose, the country is going to make sure that the disclosure of cryptocurrencies and digital assets is a must.
Any firm offering cryptocurrencies in Italy as well as the cryptocurrency holders/traders will be required to report assets in their possession.
They will also be required to provide proof of tax payments for holding digital assets.
It is being expected that the government of Italy may introduce the newly added amendments in the budget for 2023.
The aspects that the government is aiming to target in the cryptocurrency industry for taxation are trading and wealth.
Proposal made by Giorgia Meloni
The proposal for crypto taxation has been made by the current Prime Minister of Italy, Giorgia Meloni.
According to the prime minister’s proposal, a 26% levy is to be implemented on the gains generated from cryptocurrency trading. However, the levy would apply to gains of over €2,000.
For now, the government has not decided what they will do with the accounts that generate lower profits from the cryptocurrency trades.
Notification for Cryptocurrency Holders
The ruling party has already brought things into motion in case the proposal is passed. If that is passed, then the implementation of taxes will be ensured by the end of January.
The government had already issued a statement for all the cryptocurrency investors in Italy about the upcoming changes.
The government advised all cryptocurrency holders to report the assets and the values that they have in their possession. The locals have been given until January 1, 2023, to report their holdings.
The investors and holders who report their holdings by that time will be eligible for a 14% tax on the crypto profits.
According to the officials, by extending their hand, they will be able to bring more people to the front.
At the moment, millions of people in Italy are in possession of cryptocurrencies but most of them have not revealed their assets.
The 14% tax announcement they have made would encourage the majority of the locals to come up and reveal their possessions.
Current Situation of Crypto in Italy
As of now, cryptocurrencies are treated as foreign currencies in Italy. Whether it is the cryptocurrencies or the digital assets/tokens, they are perceived as any foreign currency.
As the taxes implemented on foreign currencies are less, the cryptocurrencies and digital assets are also taxed at a lower rate.
There is a possibility that the government of Italy may make some amendments to the proposal going forward. As the parliament looks into the matter, some changes may be introduced.
However, given the current situation of the global economy, there is a high chance the proposal will be accepted by the majority.
According to data, the number of people currently in possession of cryptocurrencies in Italy is around 1.3 million. However, the government feels that the number is much higher than 1.3 million.
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