The Italian parliament has approved a proposed 26% tax on cryptocurrency earnings over 2,000 euros ($2,110). The new law also encourages taxpayers to declare their cryptocurrencies. According to this law, cryptocurrency owners are eligible for an amnesty for undeclared earnings carried out in previous years by paying a “substitute tax” of 3.5%, plus a fine of 0.5% for each additional year.
The law was approved by the Italian parliament on December 29 as part of the 2023 budgetreports the local media Rai News.
As expected, the law also allows taxpayers to do this deduct their losses in cryptocurrencies exceeding 2,000 euros.
Another incentive of the proposal is to let taxpayers report their cryptocurrency holdings from 1 January and pay a tax rate of 14%.
The budget, which includes the new tax on cryptocurrency earnings, is the presented for the first time by the new Italian Prime Minister Giorgia Meloniwho during his campaign promised major tax cuts for Italians.
The decision comes after the EU approved the cryptocurrency markets bill last year. (Not). The bill establishes a regulatory framework for cryptocurrencies across the EU and is expected to enter into force in 2024.
Portugal is no longer a cryptocurrency haven
Recently, Portugal has also proposed to tax cryptocurrency earnings. Note that the country has been known for several years as a tax haven for cryptocurrencies.
According to the proposal, earnings on cryptocurrencies held for less than a year will, from 2023, be taxed at a rate of 28%superior to the Italian one. However, since the tax only applies to earnings on cryptocurrencies held for less than a year, Portugal could still be considered one of the most crypto-friendly countries in Europe.
So far, Portugal hasn’t taxed cryptocurrency earnings at all, which has helped make some a popular destination for cryptocurrency owners who made a fortune.
Spanish tax lawyers have reported that Spaniards who hold cryptocurrencies are “fleeing” to Portugal to evade levies on their crypto-related profits. They warned that Spain was on the verge of becoming a ‘crypto wasteland’ as the country steps up its regulation in this area.
Portuguese lawmakers have argued that the move to tax cryptocurrencies is necessary to align rules with legislation in other European countries, including Germany, where investors pay no taxes if they hold cryptocurrencies more than 10 years a year.
So far, no other European country has announced new crypto-specific tax rules for 2023.
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