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Italy will impose a capital gains tax of 26% on cryptocurrency earnings

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Italy is planning to tighten regulations for digital currencies in 2023 by expanding its tax laws to include cryptocurrency trading, according to budget documents released Dec. 1.

Included in the 2023 budget are plans for duty A 26% tax on profits over €2,000 ($2,062) on cryptocurrency trading, according to Bloomberg. Historically, digital currencies had lower tax rates because they were considered “foreign currency”.

If the proposed bill is signed into law, taxpayers will have the option to declare the value of their holdings of digital assets from January 1 and pay the 14% tax. This aims to incentivize Italians to declare their digital assets in their tax returns.

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According to Tripe A data, 2.3% of the population of Italy Equal About 1.3 million people own crypto assets. By July 2022, it was estimated that about 57% of cryptocurrency users were male, while 43% of users were female, with most of its users belonging to the 28-38 age group.

Related: IRS to call out users who fail to report and pay taxes on crypto transactions

Italy seems to be following in the footsteps of Portugal. In October, Portugal — formerly a tax haven for cryptocurrencies — proposed a 28% tax on capital gains Cryptocurrency held for less than a year.

In the 2023 state budget, the Portuguese government addressed the taxation of cryptocurrencies, which had previously been left untouched by tax authorities because digital assets were not recognized as legal tender.

Portugal intends to create a “broad and adequate” tax framework aimed at addressing taxation and classification of cryptocurrencies. The proposed tax bill covers operations involving mining and trading of cryptocurrencies as well as capital gains.

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