Italy To Hammer Bitcoin Profits By Hiking Capital Gains Tax On Cryptocurrencies To 42%

Updated: 17 October 2024

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The Italian government has proposed hiking capital gains tax on Bitcoin and other cryptocurrency profits to 42% from 26% in a move that shocked local investors.

The government announced the tax hike as a part of its 2025 budget proposal to generate extra revenue to support public services. Deputy Minister Maurizio Leo told a press conference that it is needed to address the country’s budget shortfalls.

Crypto Capital Gains Tax Would Be One Of The Highest In Europe

If implemented, the tax would be one of the highest in Europe on crypto profits, and it prompted harsh criticism from the community on social media platforms.

“It’s a death move to increase taxes as that only serves to detract wealth and new ideas,” said macro trader and investor Jason Pizzino on X. “Italy is a dying state.”

Italy is a dying state. It's a beautiful IRL museum to visit as a tourist. Note that I am an Italian citizen. I love the place. But no one cares if they raise taxes on Bitcoin because the nett wealth is leaving Italy not going to it. It's a death move to increase taxes as that… https://t.co/9PCir8uvRq

— Jason Pizzino 🌞 (@jasonpizzino) October 16, 2024

Data from on-chain analytics firm Santiment shows the social volume for the key words “Italy” and “tax” spiked to monthly highs as crypto users, especially those living in Italy, expressed their concerns about the proposal.

Still, previous attempts by other countries to tax cryptocurrency gains have often failed to boost government revenues. When India introduced a digital-asset tax a couple of years ago, local trading volumes collapsed as investors moved to offshore platforms.

Bitcoin Price Faces Bearish Sentiment In Italy

Data from Santiment also shows bearish sentiment flooded the crypto space in response to Italy’s new tax proposal. Social volume for terms like “Italy+sell”, “Italy +selling”, Italy+sold”, or “Italy+bearish” skyrocketed.

Despite that, the Bitcoin price was largely unaffected. As of 04:06 a.m. ET, BTC is trading at $67,379, down about a third of a percent in the last 24 hours, according to CoinGecko.

The proposal awaits parliamentary approval before it can become law.