Italian Government Moves to Increase Tax on Bitcoin Gains and Expand Digital Services Tax

Italian Government Moves to Increase Tax on Bitcoin Gains and Expand Digital Services Tax

The Italian government is considering raising the capital gains tax on Bitcoin investments from 26% to 42%, according to Deputy Economy Minister Maurizio Leo. Speaking at a news conference at Palazzo Chigi on Oct. 16, Leo discussed the new budget bill approved by the Council of Ministers, which includes the proposed increase in the withholding tax for Bitcoin gains.

Leo stated, “On capital gains from Bitcoin, the withholding tax increases from 26% to 42%.” The change is part of Italy’s broader budget measures aimed at revising the nation’s tax policies to generate additional revenue.

The new budget also includes significant changes to Italy’s Digital Services Tax (DST), commonly referred to as the “web tax.” The DST, introduced in 2019, currently applies to companies generating at least 750 million euros ($817 million) globally and 5.5 million euros ($5.9 million) from digital services in Italy. Leo announced that the new budget bill seeks to remove these minimum revenue requirements, thereby expanding the scope of the tax to include more companies.

The news of the tax changes came as the Italian government approved a 30 billion euro ($33 billion) budget for 2025, which will be partly funded by levies on Italian banks and insurance companies. According to an Associated Press report, the budget still requires approval from the Italian parliament, with a final vote expected by the end of the year.

Prime Minister Giorgia Meloni announced that Italy expects to raise 3.5 billion euros from banks and insurers to fund public services and support vulnerable citizens. Meloni reassured the public that there would be no new taxes for ordinary citizens, emphasizing that the raised funds would go toward improving healthcare and other essential services.

The proposed increase in the Bitcoin capital gains tax follows previous adjustments for crypto assets in Italy. In late 2022, the Italian Senate increased the capital gains tax on crypto trading above 2,000 euros to 26%, which was included in the 2023 budget. Now, the government appears to be taking a more aggressive stance toward taxing crypto gains as part of its latest budget measures.

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