In Italy, the proposal to increase the taxation of capital gains on cryptocurrencies to 42% (from the previous 26%) seems to be experiencing a moment of backtracking. It appears that the sector is mobilizing to prevent capital flight abroad.
Italy: the proposal for increased crypto taxation at 42% is in reverse
The press review of Caffè Affari today from Milano Finanza highlights a possible backtrack on the proposal in Italy to increase the taxation on crypto capital gains to 42%.
La rassegna stampa di Caffè Affari – 5 novembre#Unicredit sale al 90% di Alpha Bank Romania; Moncler ora vuole Burberry? La Borsa ci scommette; Criptotassa verso una riduzione; Auto, vendite in calo del 9%; #Harris–#Trump, l’America decide
Con A. Valente:… pic.twitter.com/zzLU8vjZG6
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In practice, it seems that the cryptocurrency industry sector in Italy is mobilizing to prevent capital flight abroad.
In fact, among the first consequences of the potential increase in the tax on capital gains in cryptocurrencies would be precisely to move one’s funds where the taxation is lower.
According to what is reported, it is the Lega party that is urging the rest of the politicians to “handle with care” the matter related to Bitcoin and cryptocurrencies.
Today, Federico Freni will speak at a conference dedicated to the social value of crypto and Web3, created with the objective of raising awareness about an asset class that could even become strategic for the country.
These moves aim to avert the increase of the tax proposed by the Deputy Minister of Economy Maurizio Leo.
Italy and the taxation on cryptocurrencies: the discovery of the loophole in the law
At the end of October, the new discovery by Stefano Capaccioli, a well-known accountant and expert in cryptocurrencies, was reported, which reveals a loophole in the law regulating crypto taxes in Italy.
In practice, it is an issue contained in paragraph c-sexies of article 67 of the Tuir. When in 2014 the DL 66/2014 was approved, paragraph 1 of article 67 of the Tuir ranged from letter c-bis to c-quinquies. Ten years ago, paragraph c-sexies did not exist.
This serves to understand that paragraph c-sexies was added at the end of 2022, in the Budget Law for 2023, and recognizes and defines cryptocurrencies in Italy.
Specifically, paragraph 1 of article 67 of the Tuir of DL 66/2014, introduced ten years ago a new rate of 26% for the taxation of capital gains from different incomes. The new rate of 26% was higher than the previous one of 12.5%.
And here we are explaining the flaw identified by Capaccioli. In practice, while the new 26% rate was being introduced ten years ago, paragraph c-sexies did not yet exist. The text explicitly specified that the increase of the rate to 26% was to be applied also to paragraph c but only up to letter c-quinquies.
It follows that the 26% rate for the taxation of capital gains from different incomes is not applicable to paragraph c-sexies and therefore to cryptocurrencies.
This means that crypto capital gains taxed starting from 2023 (year of entry into force of paragraph c-sexies), and paid for the first time in this 2024, should be taxed at 12.5%, which is the rate prior to the one introduced 10 years ago.
For those who have already paid taxes on crypto capital gains in Italy, they should request a refund.
Furthermore, whatever the new rate approved will be, it will be applied in 2025, so even for crypto capital gains realized in 2024, the tax rate should be 12.5% and not 26%.
Last place for AI investments in the EMEA region
Italy is making headlines in other technologies as well. The ServiceNow survey ranked it in last place for AI investments in the EMEA region.
In fact, it seems that only 67% of Italian companies say they intend to invest in Artificial Intelligence, compared to 86% in the Netherlands, 85% in the United Kingdom, and 81% in Spain.
At the same time, however, it seems that Microsofthas decided to invest a whopping 4.3 billion euros in Italy, precisely to strengthen the digital infrastructure and AI development, with the support of Premier Giorgia Meloni.
