The Italian Parliament has decided to impose a capital tax of 26% on profits exceeding $2,060 (approximately Rs.1.7 lakh) generated from cryptocurrency trading. The country has acknowledged the presence of a virtual digital asset (VDA) sector in the current financial system. The imposition of this tax will be implemented as part of Italy’s budget plan for 2023. Currently, the country has yet to decide on an exact set of frameworks around the cryptocurrency sector. The introduction of VDA into the tax regime for Italy, therefore, marks an important moment for the burgeoning fintech sector.
The country has listed a number of incentives for Cryptocurrency investors to encourage them to claim their shares. Such an incentive allows taxpayers to cut their capital gains at 14% of the price of crypto assets as recorded on January 1, according to a report. report by Bitcoin.com.
In addition, losses beyond the $2,060 mark (approximately Rs 1.7 lakh) incurred as a result of cryptocurrency fluctuations will be considered as a tax deduction, which will be added as information during the tax period. next in Italy.
Most transactions facilitated through crypto assets are anonymous and untraceable. By taxing crypto transactions, countries like Italy have joined countries like India, Australia, Portugal, and South Korea, in their efforts to develop tax laws for the crypto sector.
Since last month, Italy has been waiting Cryptocurrency tax invoice to be signed into law.
country is estimate to have more than 1.3 million crypto holders. It has been taking gradual but continuous steps in favor of the crypto industry so that players feel welcome when it comes to setting up shop and generating revenue.
CryptoCom and Coinbase Cryptocurrency exchange for example, recently won approval from the Italian financial regulator to serve clients in the region.
Italy is also exploring ways to use blockchain technology. The government has chosen Algorand blockchain to bring about improvements in the existing banking system starting this year. Algorand will support an upcoming digital assurance platform in Italy to issue bank guarantees and insurance on blockchain, which is digital ledger technology (DLT).
The UK, India, Australia, Portugaland south Korea are among other countries that have created or are in the process of developing tax legislation for the thriving crypto sector in their respective territories.
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