Tether CEO slams Italy plan to increase capital gain tax on Bitcoin to 42% Tether CEO slams Italy plan to increase capital gain tax on Bitcoin to 42%
Crypto users said they would consider leaving Italy due to the high tax regime.
2 min read
Updated: Oct. 16, 2024 at 1:53 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Italy is preparing to increase the capital gains tax on Bitcoin and other cryptocurrencies to 42%, according to Deputy Finance Minister Maurizio Leo, who shared the news during an Oct. 16 conference.
Leo explained that as cryptocurrencies, particularly Bitcoin, gain popularity, the government anticipates raising the withholding tax rate from its current 26% to 42%.
According to a translation of his statement:
“As this phenomenon (bitcoin) is spreading we expect the withholding tax to increase from 26% to 42%.”
This proposed tax hike could position Italy among the countries with the highest crypto taxation globally.
Meanwhile, this new tax plan appears to diverge from earlier promises made by Prime Minister Giorgia Meloni, who had assured citizens there would be no broad tax hikes. However, her comments seem to have been aimed at avoiding widespread tax increases rather than specific changes to niche sectors like crypto.
She wrote on X:
“As we promised, there will be no new taxes for citizens. In addition, we will make the tax cut on workers structural, and 3.5 billion from banks and insurance companies will be allocated to Healthcare and the most vulnerable to ensure better services that are closer to everyone’s needs.”
It is still uncertain whether the new crypto tax policy will be effective. Countries like India, which introduced heavy taxes on digital assets, saw trading volumes drop significantly as investors turned to offshore platforms to escape the high tax burden.
Crypto community reacts
Meanwhile, the announcement has sparked backlash from Italy’s crypto community, with many users considering relocating to countries with more favorable tax environments, such as Dubai. Last week, The UAE exempted all crypto transactions from having to pay value-added tax.
Tether CEO Paolo Ardoino voiced his frustration, sharing a meme that hinted at an exodus of crypto users from Italy to more welcoming jurisdictions.
He later commented that Italy’s logic seemed to be that the more successful a sector becomes, the more it should be taxed.
In a sarcastic tone, Ardoino added:
“How dare [Italians] use Bitcoin as protection or a hedge against Italian financial policies.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Tether Limited
Tether Limited is the company that introduced Tether (USD₮ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.
Paolo Ardoino joined Bitfinex at the beginning of 2015 and now serves as Chief Technology Officer.
