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Italy plans to lower its proposed crypto capital gains tax from 42%, citing industry backlash and political disagreements. An amendment has been proposed that would limit the tax increase to 28% instead of the originally planned 42%.
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The Italian government will scrap plans to increase taxes on crypto capital gains, Reuters reported on Tuesday. The Ministry of Finance had initially proposed raising the tax rate from 26% to 42% to support a range of socio-economic initiatives, but faced intense lobbying from industry and disagreement within the governing coalition. I've done it.
Alliance party lawmaker Giulio Centemero and Finance Undersecretary Federico Freni said the tax increase “will be significantly reduced during parliamentary action,” the report said.
“There is no longer any prejudice against cryptocurrencies,” Centemero and Freni said.
Lawmakers from the ruling coalition argued that the rapid increase could push crypto activity underground, negatively impacting both investors and the Italian economy. According to previous reporting from Bloomberg, there is a push to cap tax increases at 28%, rather than the proposed 42%. There is also ongoing debate about maintaining the current tax rate of 26%.
Alongside the rollback of plans to increase taxes on crypto transactions, lawmakers from Italy's ruling coalition are pushing for a progressive tax and higher exemption thresholds to protect small investors.
The ruling coalition is exploring ways to create a supportive environment for crypto investment while addressing fiscal challenges. The revised tax bill is part of the 2025 budget and must be approved by Congress by the end of December.
The virtual currency tax reform bill is one of more than 300 “priority amendments” proposed by the ruling coalition to amend Economy Minister Giancarlo Giorgetti's budget. Mr Giorgetti, who initially proposed a 42% tax rate, announced his intention to consider alternative taxation methods amid internal party disputes.
Other countries, such as Russia and the Czech Republic, have also begun taxing crypto transactions. Russia officially recognizes digital currencies as property and imposes a personal income tax of 13% to 15% on the sale of virtual currencies, while exempting mining operations from value-added tax.
Meanwhile, the Czech Republic has introduced reforms that exempt individuals from capital gains tax on crypto assets held for more than three years, with the aim of fostering a more favorable environment for digital asset investments.
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