The Italian government is expected to dilute a proposed increase in the tax on cryptocurrency trading, according to sources familiar with the matter. The initial proposal, included in last month’s budget, aimed to raise the levy on crypto gains from 26% to a steep 42%. However, following pushback from the crypto industry, the League, a junior partner in Prime Minister Giorgia Meloni’s coalition government, has proposed an amendment to limit the increase to 28%.
Crypto industry executives had argued that the 42% rate was excessive and would disadvantage Italy compared to other European Union countries, particularly as the EU prepares to fully implement its Markets in Cryptoassets (MiCA) regulations at the end of the year.
Bloomberg News has seen a copy of the League’s proposal, which also includes the establishment of a permanent working group composed of digital asset firms and consumer associations to educate investors about cryptocurrencies. While no final decision has been made, and the government may still modify the proposal, sources suggest it is likely to be approved.
Adding to the debate, another coalition partner, Forza Italia, has put forward a separate amendment seeking to entirely scrap the proposed tax increase and remove the existing exemption on gains of €2,000 (approximately $2,120) or less. Paolo Barelli, Forza Italia’s whip in the lower chamber of Parliament, criticized the proposed hike, stating, “Going from 26% to 42% has a reason that isn’t widely understandable by anyone, whether that be a normal citizen or a large investor.” He described the amendment as an “invitation” for the government to consider alternative approaches.
Finance Minister Giancarlo Giorgetti has indicated a willingness to explore different taxation models based on investment holding periods. A Finance Ministry spokesperson declined to answer specific questions, referring to Giorgetti’s remarks to lawmakers last week.
Italy’s move to adjust its crypto tax policy comes as the country seeks to improve its public finances following the reinstatement of European Union fiscal rules.
