Italy approves 26% capital gains tax on cryptocurrencies

The Italian Senate approved the new tax rate for crypto trading as part of the budget legislation for 2023.

On Dec. 29, 2022, days before the year’s end, Italy’s Senate approved its budget for 2023, which included an increase in taxation for crypto investors — a 26% tax on capital gains on crypto-asset trading over 2,000 euros (approximately $2,13 at time of publication).

The approved legislation defines crypto assets as “a digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.” Previously, crypto assets were treated as foreign currencies in the country, with lower taxes.

As reported by Cointelegraph, the bill also establishes that taxpayers will have the option to declare the value of their digital-asset holdings as of Jan. 1 and pay a 14% tax, incentives that are intended to encourage Italians to declare their digital assets.

Other changes introduced by the budget law include tax amnesties to reduce penalties on missed tax payments, fiscal incentives for job creation and a reduction in the retirement age. It also includes 21 billion euros ($22.4 billion) of tax breaks for businesses and households dealing with the energy crisis.

Related: MiCA bill contains a clear warning for crypto influencers

Giorgia Meloni, the first woman to serve as Italy’s prime minister, received wide support for her bill from the legislative body, even though she promised dramatic tax cuts when elected in September.

According to local media reports, measures from Italy’s government to reduce gas consumption across the country including over 15 days without central heating for buildings, with the population being asked to turn their heating down one degree and turn it off one hour more per day during the winter.

Italy‘s legislation follows the approval of the Markets in Crypto Assets (MiCA) bill on Oct. 10, establishing a consistent regulatory framework for cryptocurrency in the 27 member countries of the European Union. MiCA is expected to come into effect in 2024.

Read More

New House Financial Services Committee chair wants to delay crypto tax changes

U.S. Republican Representative Patrick McHenry called for clarification on a “poorly” written digital asset tax provision in a letter to the Treasury.

The incoming United States House Financial Services Committee chair, Patrick McHenry, wants the Treasury to delay implementing a section of the Infrastructure Investment and Jobs Act that deals with digital assets and tax collection.

McHenry sent a letter on Dec. 14 to U.S. Treasury Secretary Janet Yellen with questions and concerns about the scope of Section 80603 of the act. In the letter, he requested clarification over the “poorly drafted” and potentially privacy-compromising section that deals with the taxation of digital assets, scheduled to go into effect next yea.

He said the section requires the government to treat digital assets as the equivalent of cash for tax purposes, which could “jeopardize” the privacy of Americans and hamp innovation.

The section, called “Information Reporting for Brokers and Digital Assets,” requires brokers to report certain information relating to dealing with digital assets to the Internal Revenue Service (IRS).

McHenry argues the section has been drafted badly and that the term “brokers” could be “wrongly interpreted” as applying to a wider range of people and companies than intended.

The Act contains a provision requiring individuals or entities engaging in a trade or business to report to the IRS any digital asset transactions that exceed $10,000.

The requirement was challenged earlier this year by Coin Center, a nonprofit advocacy group focused on blockchain technology, which filed a lawsuit against the Treasury arguing that the rule will impose a “mass surveillance” regime on U.S. citizens.

Related: Sens. Warren and Marshall introduce new money-laundering legislation for crypto

According to Fordham International Law Journal, the section is likely to impose reporting requirements on the major cryptocurrency exchanges that already have user information, including customers’ names, addresses and social security numbers.

McHenry acknowledged it was a positive step forward to see the Treasury Department state that “ancillary parties” should not be subject to the same reporting requirements as brokers.

In February, U.S. Senator Rob Portman tweeted a letter from U.S. Assistant Secretary for Legislative Affairs Jonathan Davies that clarified that parties such as crypto miners and stakers are not subject to the new legislation.

McHenry’s letter concluded by requesting the Treasury “immediately” publish the rules under the section and delay its effective date to give market participants time to comply with any new requirements.

It’s the second letter McHenry has sent to Yellen this year, having sent her a letter on Jan. 26 urging the Treasury secretary to clarify the definition of a broker.

Read More
Bitcoin

Portugal Prepares to Tax Crypto Gains at Rate of 28%, Draft Budget Unveils

Portugal Prepares to Tax Crypto Gains at Rate of 28%, Draft Budget UnveilsAuthorities in Portugal intend to impose a levy on gains from short-term crypto investments with the state budget for next year. The document, which still needs the approval of Portuguese lawmakers, signals a change in the EU nation’s positive attitude towards crypto assets. Government of Portugal Proposes New Tax for Cryptocurrency-Related Gains In the past […]
Read More
Switzerland-based crypto mining firm expands operations to Texas

Switzerland-based crypto mining firm expands operations to Texas

The company reported its operations in the United States will have an initial capacity of 3 megawatts, aiming for the firm’s total hashrate to be more than 1.6 EH/s.

White Rock Management, a cryptocurrency mining company based in Switzerland, said it will be expanding its operations to the United States, starting with Texas.

In a Tuesday announcement, White Rock said it will be partnering with Natural Gas Onsite Neutralization, or NGON, a company that captures natural gas that would otherwise be burned and converts it to energy for use in the firm’s Bitcoin (BTC) mining operations. White Rock said it will be operating out of NGON’s facility in the Brazos Valley region, mining BTC using “environmentally responsible” methods.

According to White Rock CEO Andy Long, the move into Texas was just the first in the firm’s plans to expand its BTC mining operations to areas capable of providing energy from natural gas outside the scope of the state’s power grid. The company began mining crypto at data centers in Sweden in November 2021 and reported its operations in the United States will have an initial capacity of 3 megawatts, aiming for the firm’s total hashrate to be more than 1.6 EH/s.

Crypto mining firm White Rock Management’s operations in Texas. Source: White Rock

The recent market downturn — the price of Bitcoin has fallen more than 28% in the last 30 days — may be impacting crypto miners’ profits. Cointelegraph reported on June 10 that “raw” costs for miners in North America were roughly $22,000 per Bitcoin, with additional costs potentially bringing the total to more than $30,000. Many mining firms in the region including Bitfarms have reported selling some of their BTC holdings amid the bear market.

Related: Bitcoin miners sold their entire May harvest: report

It’s unclear how the recent volatility may affect White Rock’s operations in the Lone Star State. Prior to the market downturn in May, Argo Blockchain said it was planning to launch mining operations in Texas’ Dickens County almost a year after first breaking ground on the 200-megawatt data center. In April, the City of Fort Worth also launched a pilot program to mine BTC using three rigs in its city hall building.

Read More
India Maintains 1% Tax-Deducted-At-Source For Crypto Assets

India Maintains 1% Tax-Deducted-At-Source For Crypto Assets

Coinbase’s plan to establish an outpost in India may clash with anti-crypto laws

Many industry participants have decried India’s crypto tax regime as too harsh and discouraging innovation. As such, it was unsurprising to see a level of excitement when the country’s Tax Department’s website displayed a 0.1% tax-deducted-at-source (TDS) for crypto instead of the announced 1% in March. However, these celebrations have been short-lived as the government […]

Read More