Italy Considers Raising Bitcoin Capital Gains Tax to 42%
The Italian government will increase the capital gains tax on Bitcoin from 26% to 42%. According to reports, this was announced by the Deputy Economy Minister Maurizio Leo in a press conference held on 16 October 2024, at Palazzo Chigi. This increase in cryptocurrency taxation would be a part of a general budget bill that has already been approved by the Council of Ministers.
Why Increase the Tax?
This intended collection of the capital gains tax represents an Italian attempt to strengthen its public finances and generate additional financial revenues. The government has kept its eyes on this emerging digital asset sector as a virgin area of tax earnings. Bitcoin and other cryptocurrencies have gained unprecedented attraction among investors in recent years. By raising the tax to 42%, what the government wants is to compensate for the budget without adding new taxes on individuals.
Changes to Digital Services Tax
Among the other key amendments introduced in the budget bill is the one that abolishes the minimum revenues threshold for Italy’s Digital Services Tax. Under the current rules, DST applies to companies whose annual revenues exceed 750 million euros globally and at least 5.5 million euros in revenue from digital services within Italy. The proposed measure removes these thresholds, expanding the base of businesses subject to this tax.
The DST was introduced back in 2019, aiming to make the likes of Google, Facebook, and Amazon pay a fair level of tax from the digital revenues received in Italy. While removing this minimum revenue threshold could see smaller digital service providers brought into the tax net.
Broader Budget Context
The tax measures form part of a wider 30 billion euro ($33 billion) budget for 2025. It also includes a levy on Italian banks and insurers, expected to yield around an extra 3.5 billion euros in revenue. Prime Minister Giorgia Meloni has promised that the eventual capital raised from such a levy will be reinvested in healthcare and the protection of vulnerable citizens.
Meloni came out personally to ensure that no new taxes would be levied on the citizenry, but targets businesses instead. A proposed budget will now pass into Italian parliament review and is expected to take a final vote by the end of the year.
