Tightening the regulation on digital assets and expanding taxation on crypto trading, Italy is planning to impose a 26 per cent tax on digital assets for gains above 2,000 euros (about $2,062), according to a Bloomberg report. The Italian tax authorities currently treat digital coins and tokens as foreign currency and impose tax accordingly, which is lower than the proposed 26 per cent.
The new proposal is part of Italy’s proposed 2023 budget. According to the Bloomberg report, the bill put forward by Prime Minister Giorgia Meloni’s government also gives taxpayers the option to declare the value of assets as of January 1, 2023, paying a 14 per cent tax, to encourage Italians to declare their holdings of digital assets in their tax returns.
The proposed law, which may be amended in parliament, also includes disclosure obligations and extends stamp duty to cryptocurrencies.
Recently, New York took a first-in-the-nation step to tap the brakes on the spread of cryptocurrency mining, under legislation that Governor Kathy Hochul signed. The measure came amid growing scrutiny of the cryptocurrency industry following this month’s collapse of the FTX exchange. But, New York’s measure, which passed the state Legislature in June, is specifically concerned with the environmental aspects of crypto.
The new law sets a two-year moratorium on new and renewed air permits for fossil fuel power plants used for energy-intensive “proof-of-work” cryptocurrency mining — a term for the computational process that records and secures transactions in bitcoin and similar forms of digital money. Proof-of-work is the blockchain-based algorithm used by bitcoin and some other cryptocurrencies.
Cryptocurrency mining requires specialised computers that consume large amounts of energy. One study calculated that as of November 2018, bitcoin’s annual electricity consumption was comparable to Hong Kong’s in 2019, according to the U.S. Energy Information Administration.
In India, the rules regarding the tax deducted at source on virtual digital assets (VDAs) and cryptocurrencies are already in place. The rules make it mandatory for the purchaser of a VDA to deduct 1 per cent of the amount paid to the seller (resident Indian) as income tax deducted at source (TDS).
Finance Minister Nirmala Sitharaman in the Union Budget 2022 also introduced the provision of tax deducted at source at 1 per cent levied on payments made on transfer of virtual assets. It also announced a levy of 30 per cent on virtual assets, including cryptocurrency and non-fungible tokens or NFTs.
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