Italy’s government has decided to reduce the proposed capital gains tax on cryptocurrency transactions from 42% to 28%, following significant feedback from industry stakeholders and political figures.

The initial proposal, introduced in October 2024, aimed to increase the tax rate from the existing 26% to 42%, sparking widespread concern among investors and businesses within the cryptocurrency sector.

Deputy Economy Minister Maurizio Leo announced the revised tax plan, emphasizing the government’s commitment to fostering a more favorable environment for digital asset investments while ensuring appropriate taxation. The adjustment reflects a balance between generating revenue and supporting the growth of the cryptocurrency industry in Italy.

The initial 42% tax proposal faced criticism from various quarters, including members of the ruling coalition. Lawmaker Giulio Centemero described the higher tax rate as “counterproductive” and called for a comprehensive dialogue with market participants to develop a more effective taxation framework.

Industry experts have welcomed the reduction to 28%, viewing it as a positive step toward maintaining Italy’s competitiveness in the rapidly evolving digital economy.

The revised tax rate is expected to encourage both domestic and international investors to engage more actively in the Italian cryptocurrency market.

The government’s decision aligns with broader European Union efforts to standardize cryptocurrency regulations across member states. The Markets in Crypto-Assets (MiCA) framework aims to provide clear guidelines for digital asset operations, promoting transparency and investor protection within the EU.

The revised tax policy is set to be included in Italy’s 2025 budget, which requires parliamentary approval by the end of December 2024.

Lawmakers are expected to deliberate on the proposal in the coming weeks, with the outcome likely to influence Italy’s position in the global cryptocurrency landscape.

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