Italy plans to raise the capital gains tax on Bitcoin from 26% to 42%. This decision is part of the government’s efforts to finance costly election promises while reducing the fiscal deficit.
Deputy Finance Minister Maurizio Leo announced the change during a conference call today (Wednesday). He indicated that the move is in response to the increasing popularity of Bitcoin, referring to it as a “spreading phenomenon.” This statement was reported by Bloomberg.
Regulatory Changes Affect Bitcoin
Other countries have previously attempted to tax cryptocurrency trading, but these efforts have often failed to significantly boost government revenues. For example, India introduced stringent digital asset taxes two years ago. This led to a decline in trading volumes, as many local investors shifted to offshore platforms to avoid the taxes.
Italy's announcement comes at a time when the European Union is preparing to implement new regulations for cryptocurrencies. Known as MiCA, this regulatory framework is expected to be fully in effect by the end of this year.
⚡️JUST IN: ???????? Italy is reportedly considering raising its capital gains tax on #Bitcoin and other cryptos from the current 26% to as high as 42%.@paoloardoino, any chance you can stop this? ???? pic.twitter.com/v7cvpWiDyY
— Satoshi Club (@esatoshiclub) October 16, 2024
Despite the tax increase, Bitcoin's value has risen. As of 12 pm in London on Wednesday, Bitcoin was trading 1.8% higher. The cryptocurrency has experienced a 17% increase in value over the past month.
Concerns Over Global Crypto Structures
The European Securities and Markets Authority (ESMA) has issued an Opinion regarding the authorization of global crypto firms under the MiCA Regulation. The Opinion addresses risks associated with these firms seeking EU authorization while maintaining significant operations outside the EU's regulatory scope, as reported by Finance Magnates.
ESMA expresses concerns about complex structures, such as EU-authorized brokers routing orders to non-EU venues, which may impact consumer protection. It advises National Competent Authorities to evaluate these structures carefully and emphasizes a case-by-case assessment of execution, conflicts of interest, and custody obligations.
This article was written by Tareq Sikder at www.financemagnates.com.
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