Italy Raises Crypto Capital Gains Tax to 33% From 2026, Ends €2,000 Exemption
Italy’s 2025 Budget Law raises the Italy crypto capital gains tax on digital assets from 26% to 33%, effective January 1, 2026. The change also removes the annual €2,000 tax-free threshold, so all realized gains become taxable.
Timeline matters. The €2,000 exemption is eliminated starting in 2025, meaning traders may see tax costs increase before the headline rate change. Then, on January 1, 2026, the substitute tax rate increases from 26% to 33%.
A key provision is an optional 18% substitute tax that lets holders “step up” the tax basis of their crypto holdings starting January 1, 2025. In practice, this could reduce future tax bills if investors sell after the new 33% regime. Gains from staking, mining, or airdrops may be taxed as ordinary income (up to 43%) or may fall under the new 33% flat rate.
The fiscal impact is substantial. The article cites an example where a €10,000 realized profit would move from €2,080 tax under the prior regime (after the exemption) to €3,300 under the new Italy crypto capital gains tax rate—an increase of about 59% in the tax owed. For retail investors, the removal of the €2,000 threshold is the most immediate pain point, as even small profits may become taxable.
For markets, the move adds to Europe’s uneven national tax landscape; MiCA regulates market structure and consumer protection, not taxation. Overall, the Italy crypto capital gains tax hike may weigh on sentiment, especially among long-hold retail and active traders adjusting sell timing.
Bearish
The change is likely bearish for near-term sentiment because it increases the after-tax cost of realizing gains in Italy and removes a small-profit tax shelter (the €2,000 exemption). When taxes rise and thresholds disappear, traders often delay selling, reduce turnover, or shift activity to jurisdictions—factors that can dampen spot demand and increase short-term volatility around key dates.
The optional 18% “basis step-up” may soften the blow for long-term holders, but it can also create a tactical rush to rebalance or document positions before the 2025/2026 deadlines. Similar patterns have appeared in other jurisdictions when capital gains rates increased or exemptions were removed: volumes tend to concentrate around administrative timing, and price action can become choppier while participants reposition for the new tax regime.
Long term, the market impact depends on whether other European countries follow with harmonized or more investor-friendly tax treatment. Since MiCA does not harmonize taxation, the fragmented policy environment can continue to weigh on Europe-wide sentiment, even if global crypto demand is driven more by broader liquidity and risk appetite than by one country’s rules.