Italy Slaps 33% Capital Gains Tax on Crypto Assets Starting January 1, 2026

Italy's government has increased the capital gains tax on digital assets to 33% effective January 1, 2026. This change comes after negotiations that pushed the rate down from a proposed 42%. The new tax rate is a 27% increase over the previous rate of 26%, which was applied before the law took effect in 2025.

However, it's worth noting that the €2,000 annual exemption on capital gains tax has already been removed for Italian crypto holders starting in 2025. This means that any realized gains from digital assets will be subject to taxation, regardless of size. The new law also introduces an optional 18% substitute tax that allows holders to step up the tax basis of their crypto holdings.

The change is expected to affect not only individual investors but also the broader European crypto market. The EU's Markets in Crypto-Assets (MiCA) regulation does not directly harmonize national tax regimes, leaving each member state to set its own rules.