Italy Lowers Proposed Crypto Tax to 28% From Initial 42% Plan

• Italy reduces its proposed crypto tax rate from 42% to 28% to boost the industry.
• Prime Minister Giorgia Meloni is likely to approve the lower tax rate soon.
• Italian crypto firms argued that the original 42% tax would hurt competitiveness.

Italy has announced a reduction in its proposed tax rate on cryptocurrency transactions, opting for a 28% rate instead of the initially proposed 42%. This development, aimed at encouraging digital asset adoption, comes amid ongoing debates surrounding the nation’s taxation policies. According to recent reports, Prime Minister Giorgia Meloni is expected to approve this reduced tax rate soon.

This adjustment follows concerns raised by industry executives who argued that the original 42% rate would stifle the competitiveness of Italian crypto businesses. The current tax on cryptocurrency transactions stands at 26%, and the amended rate represents a compromise designed to balance fiscal needs with fostering growth in the sector.

Moreover, this shift highlights the government’s responsiveness to the industry’s concerns, particularly in light of global developments in digital assets.

Besides the pressure from crypto firms, the Italian government recognized the importance of sustaining a favorable climate for the sector, especially as countries like the United States make strides in their own regulatory frameworks. 

Notably, the reduction of the tax rate aligns with Italy’s broader objective to establish itself as a crypto-friendly jurisdiction. This change comes shortly after the country had proposed its original tax rate as part of the October budget discussions.

Additionally, this policy shift coincides with broader global trends in the crypto market. In January, the United States made headlines by approving its first crypto-based ETF.

Meanwhile, Bitcoin has reached new highs, trading at $89,000 this week, driven by macroeconomic factors and political shifts like the reelection of Donald Trump.

The Italian government’s decision to lower the proposed tax rate from 42% to 28% underscores its commitment to supporting local crypto businesses.

Significantly, this move also reflects the need to attract investment and innovation in the digital asset sector. While the final approval is still pending, sources indicate that the amendment is likely to receive official endorsement.