Italy Set to Increase Bitcoin Capital Gains Tax from 26% to 42%

Italy is planning to raise its capital gains tax on Bitcoin (BTC) from 26% to 42%. This increase could prompt some crypto investors to leave the country or seek alternative strategies to mitigate the impact.

The announcement came as part of Italy’s draft budgetary plan (DBP), which was unveiled on Wednesday. This plan outlines new measures aimed at generating revenue, including the proposed hike on Bitcoin taxes. The move is part of Italy’s broader effort to raise 0.2% of its gross domestic product (GDP), or about 4 billion euros ($4.35 billion), by 2025. The new tax revenues will also be drawn from changes to banking regulations, insurance products, and gaming business licenses.

With a 42% tax on capital gains from Bitcoin, Italy now ranks among the countries with the highest taxation on cryptocurrency.

Why is Italy Raising Taxes on Bitcoin?

Italy’s inflation rate fell below 1% in September, increasing pressure on the European Central Bank to lower interest rates. Meanwhile, the draft budgetary plan (DBP) predicts a decrease in revenue from banks, insurance products, and gaming businesses, estimating a decline of 0.073% of GDP in 2026 and 0.096% in 2027.

The government may also expect an uptick in Bitcoin (BTC) investments as inflation slows and a potential interest rate cut looms. Lower interest rates typically encourage investors to take more risks, as borrowing becomes cheaper.

Economy Minister Giancarlo Giorgetti is set to hold a press conference on Wednesday to discuss the details of the plan.

Will BTC Take a Hit From Increased Taxes?

The sharp increase in capital gains tax could deter Italian investors from investing in Bitcoin (BTC), potentially stifling the asset’s growth. Historically, October tends to be a bullish month for the crypto market, but this news may prompt a more cautious approach among investors.

For more news, find me on Twitter Giannis Andreou and subscribe to My channels Youtube and Rumble

What is your opinion on this particular topic?  Leave us your comment below!  We are always interested in your opinion!