As countries all over the world are mulling over imposing stringent digital currency regulations,
the Italian Parliament has introduced a 26% capital tax on crypto-asset trading as a part of its budget law for the year 2023.
In fact, the budget describes cryptos as virtual, electronically distributed ledger-based wealth that can be stored and transferred.
The 26 percent tax rate applies to gains from crypto trading if they exceed 2,000 euros, (about Rs.1.7 lakh) per tax period.
The country has listed some incentives for crypto investors to encourage them to declare their holdings.
Hence, the new bill also sets a "substitute income tax" for investors at 14 percent of the value of the assets held as of 1 January 2023,
Instead of the cost at the time of purchase.
Similarly, losses arising from crypto investments, which are higher than 2000 euros in a tax period
can be knocked off from profits and be carried out to the next tax period.
Further, Italy has acknowledged the presence of the virtual digital assets sector in the existing financial system.