The approval of Italy’s budget law for 2025 on Saturday, December 28, has significant implications for cryptocurrency holders in the country. The law includes specific provisions for the taxation of crypto capital gains, which have sparked both positive and negative reactions.
The crypto taxation in Italy: the new budget law
Article 43 of the approved bill sets the substitute tax rate on capital gains and other income at 26 percent. This addresses a loophole discovered in October regarding crypto taxation. The 26% rate now applies to all assets listed in the legislative decree.
The increase in crypto taxation
The feared increase in crypto taxation to 42% was averted in the final text. However, a new provision states that from January 1, 2026, the tax rate will rise to 33%. This means that the 26% rate will apply to crypto gains in 2025, with a higher rate coming into effect from 2026 onwards.
The elimination of the exemption threshold
Article 25 removes the exemption threshold of €2,000 for crypto capital gains. This aligns the tax regime for cryptocurrencies with other financial assets, meaning even small gains will now be taxed at 26%.
Revaluation at 18%
The law allows for a revaluation option, where a substitute tax of 18% can be paid on cryptocurrencies held as of January 1, 2025. This option provides a way to avoid the 26% tax on future gains, with the tax payable by November 30, 2025.
The reactions
The reactions to the budget law have been mixed. While some are relieved that the 42% tax increase was avoided, there is discontent over the removal of the exemption threshold and the planned tax hike for 2026. The protests reflect concerns over increased tax burdens in an already heavily taxed country.
Overall, the approved budget law will have a significant impact on cryptocurrency holders in Italy, with changes in taxation rates and thresholds affecting how gains are taxed. The reactions to these changes highlight the challenges and tensions surrounding crypto taxation in the country.