Ahh good old fascism, you've done it again. Italy's Meloni government announced late 2022 that the tax free days for crypto are coming to an end and that come 2023, a 26% tax will be imposed on crypto profits higher than 2.000 Euro.
It's not the percentage that's the issue here, as a matter of fact Italy has an overall 26% capital gain tax and it is actually quite moderate compared to the rest of Europe:
No the issue here is that your net profits higher than 2.000 Euro will be subjected to 26% taxes per tax period. So the bottom line is that annually, your trade profits can not exceed 1.999 Euro or you'll lose over a quarter of your gains. That is such a huge disadvantage for Italians it's ridiculous. If your entire portfolio totals just 5.000 Euro and 2.000 of that were profits in 2023, you'll lose 520 Euro. Meaning that if you as an Italian didn't make serious gains pre-2023, you are now 0-3 down pre-match compared to the rest of the world. Unless of course you're a hodler who doesn't care about the monetary value and wants to stake or vote with your holdings. It's a bit difficult to research but from what I get is that only actual conversion into Euros will be taxed under this system, but as hard as I tried I couldn't find anything on stablecoins which of course is the closest thing to cashing out and protect value loss during crashes.
To put to perspective how bad this actually is for Italians, Portugal also announced tax plans for crypto which would total 28% but would only be implemented on crypto trades for a period less than one year. Meaning that if you bought 1 BTC and sold it after 6 months because it made a 30% pump, you would actually only benefit 2%, but if held it for 13 months, you would be exempt from the tax altogether.
Some other countries in Europe calculate taxes based on your total holdings. Meaning that if your crypto holding exceeds the value of e.g. 50.000 Euro, you would only then be subjected to paying taxes. Which I guess is a bigger burden on long time hodlers and whales who would have accumulated enough to qualify, but still anything is better than this Italian tax plan. Or is it? Your country do things differently or you know of a worse scenario? Then do share, maybe this Italy disaster can be outperformed.
