Italy Reconsiders Crypto Tax Hike: Treasury Eyes Supportive Reforms

Italy’s government plans to reduce its proposed 42% crypto tax hike, aiming for balanced reforms to foster investment while addressing fiscal needs. Discussions suggest rates may stay at 26% or rise modestly to 28%.

The Italian government has announced its decision to scale back the proposed 42% tax increase on cryptocurrency trading gains, following intense lobbying from industry stakeholders and internal disagreements within the ruling coalition.

Taxation Proposals Under Review

Initially, the Treasury suggested raising the tax rate on crypto capital gains from 26% to 42% as part of the 2025 budget plan. However, this faced strong opposition from lawmakers, who argued that such a steep increase could push crypto activities underground, harming the broader economy and investors.

League party lawmaker Giulio Centemero and Treasury Junior Minister Federico Freni revealed that the tax hike “will be significantly reduced during parliamentary work.” They emphasized a shift in perspective, saying, “No more prejudice about cryptocurrencies.”

Revised Proposals for Balanced Reform

Instead of the 42% rate, discussions now focus on capping the tax hike at 28% or maintaining the current rate of 26%. Lawmakers are also considering progressive taxation and increased exemption thresholds to protect smaller investors. These measures aim to create a supportive framework for crypto investments while addressing the country’s fiscal challenges.

The revised tax plan, part of the 2025 budget, must be approved by parliament by the end of December. It is among more than 300 priority amendments proposed to Economy Minister Giancarlo Giorgetti’s budget plan. Giorgetti, who initially supported the 42% hike, has signaled openness to alternative approaches amid ongoing debates within his party.

International Context

Italy’s re-evaluation of crypto taxation aligns with global trends. Russia and the Czech Republic have adopted varying approaches to taxing digital assets. Russia recognizes cryptocurrency as property, imposing a personal income tax of 13%-15% on crypto sales while exempting mining operations from VAT. Meanwhile, the Czech Republic has introduced a tax exemption for crypto assets held for more than three years to encourage long-term investment.

These examples reflect a growing effort among nations to balance fiscal policies with fostering innovation in the rapidly expanding digital asset market.

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