Italy's Bitcoin Tax Hike: Capital Gains Rate to Jump by 61%, Sparking Investor Concerns
October 22, 2024In comparison, India imposes a 30% tax on cryptocurrency profits along with a 1% levy on transactions, which has reportedly led to a 97% drop in trading volumes.
Italy's government is planning a significant increase in the capital gains tax on Bitcoin investments, raising it from 26% to 42%, which amounts to a 61% hike.
Deputy Finance Minister Maurizio Leo stated that the proposed tax increase aims to deter citizens from investing in cryptocurrencies.
Critics of the tax hike, including Italian Bitcoiner Dario Giardina, argue that it is counter-productive and could drive wealth out of Italy.
There are concerns that the tax increase could lead to lower revenues and create a disparity, as Bitcoin investors would face higher rates compared to other asset classes that maintain the 26% rate.
Luca Boiardi, founder of an Italian crypto tax platform, warned that the discriminatory nature of the tax could push investors towards anonymous exchanges, increasing associated risks.
This new tax policy has raised alarms about a potential 'brain drain,' as crypto professionals might consider relocating to countries with more favorable tax regimes.
Speculation is growing that the UK may follow Italy's lead, with potential increases to the capital gains tax for Bitcoin anticipated in the upcoming Autumn Budget.
Chancellor Rachel Reeves of the UK has indicated a need to raise £40 billion through tax increases, which could affect Bitcoin investors with a possible rise from the current 20% tax rate.
Summary based on 1 source
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Source
Cryptonews • Oct 21, 2024
Italy Eyes 61% Hike to Bitcoin Taxes. Others May Follow