Governments around the world are aiming to tax profits churned out of crypto activities, to keep some records of crypto transactions.
Italy has proposed a draft crypto law bill that would allow the country to levy a 26 percent tax on crypto profits exceeding over $2,000 (roughly Rs. 1.62 lakh). As for now, the bill has not bagged all the necessary approvals that are required for it to be passed by the government. If approved, the laws around the crypto sector could go into force in the country in 2023. Like other nations, Italy has been working on formulating regulation for the crypto sector, so that investors experimenting with the sector can latch onto as many precautions as possible.
While cryptocurrencies are largely unregulated, governments around the world are working towards taxing profits churned out of crypto activities, in order to keep some records of crypto transactions.
Once signed into a law, the proposed bill will allow tax-payers to bag some incentives by declaring their crypto holdings and paying a 14 percent tax, as per a Bloomberg report.
Crypto activities have reportedly been picking up pace in Italy in recent times.
Research firm Triple-A estimates that over 1.3 million, or 2.26 percent of Italy’s total population, currently own cryptocurrency.
Back in July, Organismo Agenti e Mediatori (OAM), the top financial regulator in Italy, approved the operations of CryptoCom in the country.
Later that month, Coinbase crypto exchange also won approval from Italy’s OAM to continue to serve customers in Italy.
Italy’s Ministry of Economic Development, had earlier this year, planned to invest $46 million (roughly Rs. 364 crore) in subsidies for developing projects around blockchain, Artificial Intelligence (AI), and Internet of Things (IoT).
The country could soon be in line to accept and follow the MiCA regulation, that were recently approved by the European Union and are expected to go into effect around 2024 for all members of the bloc.
The MiCA law aims to prevent insider dealing, unlawful disclosure of inside information, and market manipulation related to crypto-assets.
Meanwhile, other nations taxing crypto gains include India, where a 30 percent tax is levied on profits from crypto transactions.
In the US, crypto is identified as a property, and not currency. US’ Internal Revenue Service (IRS) imposes a tax between 10 to 20 percent on crypto transactions in the US, reportedly based on how long the assets have been held.