Italy Approves 2025 Budget Law with Crypto Tax Changes

On December 28, 2024, Italy's Senate definitively approved the 2025 Budget Law, which includes significant changes to the taxation of cryptocurrencies. Article 43 of the law sets the substitute tax on crypto capital gains at 26%, aligning them with other financial assets under Legislative Decree no. 461/1997. This brings clarity to the previously unresolved crypto tax rate, which had been subject to confusion after crypto assets were included in the legislation.

Key Changes in the 2025 Crypto Taxation Regime:

• Increased Tax Rate: The 26% tax rate will apply to all crypto capital gains generated in 2025. Starting in 2026, the rate will rise to 33% on crypto capital gains, although this change could still be modified before it takes effect.
• Elimination of the €2,000 Exemption Threshold: The previously existing exemption for capital gains below €2,000 has been abolished. This means that, from 2025, all crypto capital gains—regardless of their amount—will be taxed at the full 26%.
• Revaluation Option at 18%: Article 26 introduces an option for crypto holders to pay a revaluation tax at 18% on the value of their holdings as of January 1, 2025. This tax can be paid in installments, providing some relief for those seeking to avoid the higher 26% capital gains tax in the future.

Public Reactions: Mixed Feelings About the New Measures

While some praised the government's decision to avoid a previously proposed 42% crypto tax increase, the removal of the €2,000 exemption threshold has sparked protests, especially among smaller crypto holders. The planned 33% tax rate for 2026 has also drawn criticism, with many questioning the justification for increasing the tax burden in a country already struggling with high taxes. Despite these concerns, the new law is set to take effect on January 1, 2025, marking a major shift in Italy's approach to cryptocurrency taxation.

On the other hand, Binance has been operational and licensed in Italy for more than two years. As the European Union’s third-largest economy, it is an important player when it comes to setting regulatory standards.