The Italian government plans to significantly increase the capital gain tax on Bitcoin (BTC) from 26% to 42% to help the country to boost its public services funding.
The increase in taxation is part of a broader plan in Italy’s 2025 budget proposal, currently awaiting parliamentary approval.
The country’s Deputy Minister of Economy, Maurizio Leo, revealed the proposed changes at a press briefing on October 16. Leo noted that the withholding tax on Bitcoin capital gains should rise to 42% according to the budget bill.
Italy Plans to Eliminate the Minimum Revenue for DST
Leo further noted that the bill would eliminate the minimum revenue threshold for Italy’s web tax, also known as the Digital Services Tax (DST), implemented as part of the nation’s budget in 2019.
According to the Deputy Minister, the DST currently applies to businesses that earned a minimum of €750 million ($817 million) in the previous calendar year and at least €5.5 million ($5.9 million) in revenue from providing digital services in Italy.
“On capital gains from Bitcoin, the withholding tax increases from 26% to 42%. On web tax revenues, we are working to eliminate the ceiling of 750 million euros and 5 million in Italy. Therefore, we are eliminating the thresholds,” Leo said.
While the tax mainly targets large-scale investors, its overall effect on Italy’s growing crypto market has yet to be determined. If approved, the proposal may position the European nation among those with the highest capital gains tax rates on digital assets, possibly preventing and discouraging some investors.
Countries Increasing Crypto Tax Rates
Meanwhile, countries like Luxembourg, Denmark, Finland, Netherlands, Germany, and Ireland demand the highest tax rates on crypto.
On the other hand, there are numerous crypto friendly countries that have more relaxed policies for individuals who decide to move there, such as El Salvador, Malaysia, Georgia, Puerto Rico, and Belarus.
