Italy's crypto investors are in for a tax hike as the country's government has raised the capital gains tax on digital assets from 26% to 33%, effective January 1, 2026. This move comes after negotiations that trimmed down an initial proposal of up to 42%. The new rate represents a 27% increase over the previous rate.
Another significant change is the abolition of the €2,000 annual tax-free threshold for crypto gains. Starting in 2025, all realized gains will be subject to taxation, regardless of size. This means that small-time traders who previously avoided taxes on modest gains will now face the same obligations as professional traders.
The law also introduces an optional 18% substitute tax that allows holders to step up the tax basis of their crypto holdings from January 1, 2025. This could be beneficial for long-term holders who believe future governments might increase the capital gains tax rate even further.