In addition to the recent actions taken by Portugal, another European country intends to raise taxes on cryptocurrency trading. The proposed budget for 2023 in Italy includes a provision that would tax capital gains from cryptocurrency at a whopping 26%.
Who Can Be Taxed?
This tax category becomes applicable when cryptocurrency earnings exceed €2,000 (about $2,062 U.S.). The Italian tax authorities have handled cryptocurrencies and tokens the same as foreign currency.
According to the newly formed government led by Prime Minister Giorgia Meloni, taxpayers in Italy will be required to record the value of their digital assets as of January 1, 2023, and pay a 14% tax. The goal is to encourage the people of Italy to declare their ownership of digital assets and to pay their taxes.
There are currently 1.3 million people living in Italy, or 2.3% of the country’s total population, who own digital assets. The United States continues to lead in the adoption of cryptocurrencies, followed by France (3.3% adoption) and the United Kingdom (5% adoption). However, levying such high cryptocurrency taxes would put off potential newcomers from joining the market.
Nonetheless, a few significant cryptocurrency exchanges have lately entered the Italian market, citing the nation’s bright financial future. The Italian government granted permission for Binance, a significant cryptocurrency exchange, to open an office there earlier this year.
Kenya Also Eyeing Crypto Profit Tax
Binance CEO Changpeng Zhao recently remarked that countries would be better off regulating cryptos as opposed to fighting them and a few countries seem to have listened.
Kenya is one of the latest countries to openly discuss crypto regulation. The Country’s parliament will be discussing a bill in parliament that seeks to recognize cryptos as securities.
Through the bill, Kenya is proposing to tax more than 4 million owners of digital assets. If passed, this rapidly growing industry will be subject to regulatory oversight for the first time in the history of the East African country.
A legislator from the ruling Kenya Kwanza Alliance named Abraham Kirwa recently submitted the Capital Markets (Amendment) Bill, 2022. Targeted for taxation are traders, wallet providers, and digital asset exchanges.
If the law passes through parliament, every Kenyan who sells a digital asset that has appreciated in value will be required to pay capital gains to the Kenya Revenue Authority (KRA).
According to the proposed bill, the regulations relating to income tax or capital gains tax, depending on how long the digital currency is held for, must apply where it is held for a period of less than or equal to twelve (12) months.
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