The proposal, announced by Deputy Economy Minister Maurizio Leo at a recent press conference on the 2025 budget, is part of a sweeping initiative to bolster the national budget and provide increased support to families, youth, and businesses.

Italian taxpayers would be required to report their cryptocurrency holdings in their “Redditi Persone Fisiche” tax form and include profits from sales or other gains, including staking rewards. Additionally, cryptocurrency holdings are expected to be disclosed under the foreign financial activities section of Italy’s 730 tax form.

This development marks Italy’s latest adjustment in its approach to digital assets. The country had previously instituted a 26% capital gains tax on crypto profits exceeding €2,000 for the 2023 tax year. The proposed 42% tax rate, which still requires approval from Italian lawmakers, underscores the government’s shift toward more rigorous crypto regulation and tax collection.

The Italian government is also refining its “web tax” policies, with plans to abolish revenue thresholds that previously allowed tech companies to generate up to €750,000 in Italy and €5 million globally before taxation. Removing these limits will likely streamline tax collection from digital service providers operating within the country.

At an Oct. 31 World Savings Day event, Economy and Finance Minister Giancarlo Giorgetti defended the tax hike, citing the “very high level of risk” associated with digital assets. His comments come as Italian officials anticipate the potential to generate around $18 million annually through the new tax structure. However, not all lawmakers agree; Giulio Centemero, a Chamber of Deputies member, argued that heavy taxation on crypto could backfire, urging further debate on the issue.

Italy’s move aligns with a broader European regulatory wave, including the Markets in Crypto-Assets (MiCA) framework, which goes into effect in December. Though MiCA will primarily target market manipulation and stablecoin regulation rather than tax policy, its implementation signals the EU’s commitment to comprehensive crypto oversight.

Koinly’s Italy guide

Koinly has a tax guide for Italy. According to Agenzia Entrate, the current tax on cryptocurrencies in Italy is 26% on all gains equal to or greater than €2,000. This is treated as “miscellaneous income”.

How much tax do you pay on crypto in Italy?

You’ll pay 26% Capital Gains Tax on capital gains over €2,000 In some cases, for example, for mining activity or the creation and sale of NFTs, you might also be required to pay income tax on any income derived from cryptocurrencies at a rate between 23% and 43%

But now, Italy is pushing for a major increase in its capital gains tax on cryptocurrencies like Bitcoin, from the current 26% to 42%, marking a nearly 62% hike. 

Source: Koinly 

Global Crypto Tax Trends: The UK and Ireland Follow Suit

Italy is not alone in reassessing crypto taxation. Across the channel, the UK introduced tax rules requiring crypto-related earnings to be separately identified in the self-assessment system, while Ireland is fast-tracking regulations to address money laundering and financial transparency in crypto, aiming to stay ahead of EU mandates.

As Italy’s lawmakers weigh the proposed tax hike, the potential impact on both investors and the broader cryptocurrency market remains in question. Italy’s evolving tax policies could provide a blueprint—or a cautionary tale—for other nations grappling with crypto’s regulatory and fiscal implications.