Bitcoin (BTC) and other cryptocurrencies are digital currencies that live independently alongside the traditional financial system. There is no single entity that has full power and you don’t have to trust anyone in a cryptocurrency’s decentralized network. Because cryptocurrencies are independent of the traditional financial system, many people still think that they do not have to declare their bitcoin or ethereum (ETH) to the tax authorities.
Each country has different rules regarding paying taxes on cryptocurrencies. In the Netherlands, for example, it falls under the heading of assets and you only pay tax if your assets exceed € 50,650. After that, you effectively pay 0.589% tax for the first €50,000. You pay 1.395% on the next €900,000 and if you exceed that, you pay 1.7639% tax for every additional euro.
Cryptotax Italy
Italy’s 2023 budget includes a proposal stating that the country plans to extend the 26% levy on capital gains to cryptocurrencies for gains greater than $2,000. At the moment, cryptocurrencies are treated as foreign currencies by the Italian tax authorities, which means that the tax is lower.
Should the bill be signed, taxpayers will have the option to declare the value of their digital assets on January 1 and pay 14% tax. This is intended to encourage Italians to declare their digital assets in their tax returns.
With this, the country follows Portugal, which has always been a tax haven for cryptocurrencies. In May this year, two minority parties saw their crypto tax bills rejected. However, the country announced in October in the state budget for 2023 that it wants to levy a capital gains tax of 28% on profits made from crypto.
Italian crypto investors
According to data from Triple A there are about 1.33 million people in Italy, which is equivalent to 1.26% of the total population, who own digital currencies. In July 2022, approximately 57% of all crypto investors were male and 43% female. Most investors are in the age group of 28 – 38 years old. Finally, about 60% of all crypto investors in Italy hold a bachelor’s degree.