Italy recently announced a significant proposal to raise the capital gains tax on Bitcoin and other cryptocurrency assets from 26% to 42%, marking one of the highest crypto tax rates in Europe.
Part of the 2025 budget plan, this tax hike is intended to address Italy’s fiscal shortfalls by tapping into the growing cryptocurrency market, which the government views as a major revenue opportunity.
Italian Deputy Economy Minister Maurizio Leo highlighted the importance of revisiting tax policies for digital assets to keep pace with market growth, stating that Bitcoin’s increasing popularity justifies this adjustment to ensure adequate government revenue streams.
The proposed tax rate has sparked widespread concern among crypto investors and industry stakeholders. Many fear that the elevated tax could deter crypto trading and push investors toward offshore platforms with more favorable tax conditions. This type of “capital flight” has already been observed in other regions with high crypto tax rates, like India, where trading volumes dropped significantly after a similar tax policy was enacted​.
If implemented, this tax would apply to profits exceeding €2,000 from Bitcoin and other crypto assets, aligning with Italy’s goal to increase tax revenue from digital finance. However, the Italian crypto community has reacted strongly, warning that such a steep tax could harm Italy’s position as a growing hub for digital asset investment. As the proposal awaits parliamentary approval, stakeholders are closely watching for potential amendments that could offer tax relief or exemptions for certain types of transactions​.
This tax hike, set to be among the highest in Europe, could make Italy a less attractive destination for crypto investment. Tether’s CEO, Paolo Ardoino, has voiced opposition to the measure, arguing that it could stifle innovation and economic growth within Italy’s tech sector.
The outcome of this proposal may ultimately shape Italy’s reputation in the global crypto market, impacting both individual investors and institutional participation in the country’s crypto space​.
