Italy to raise capital gains tax on bitcoin to 42%

Italy plans to raise the capital gains tax on bitcoin to 42 per cent from the current 26 per cent, aiming to fund costly election promises while reducing the fiscal deficit.

Deputy Finance Minister Maurizio Leo announced the change on Wednesday, noting that the popularity of bitcoin is “spreading.”

The move comes as the European Union is preparing for a new package of comprehensive cryptocurrency regulations, known as MiCA, by the end of the year. Despite the tax increase, bitcoin’s value rose by 1.8 per cent in London trading on Wednesday, reflecting a 17 per cent gain over the past month.

Italy’s decision follows global trends, as previous attempts to tax cryptocurrencies in countries like India have resulted in reduced trading volumes as investors shift to offshore platforms to avoid taxes.