Denmark and Italy to Enforce Stricter Crypto Taxation Rules

In a significant regulatory shift, Denmark and Italy are set to tighten cryptocurrency taxation, impacting investors across Europe. Italy plans to increase its capital gains tax on cryptocurrencies from 26% to a staggering 42%, effective January 1, 2025. This move aims to bolster government revenue and address the rising popularity of digital assets, according to Deputy Finance Minister Maurizio Leo.

Simultaneously, Denmark's Tax Law Council has proposed a groundbreaking change by recommending the taxation of unrealized gains on cryptocurrencies. This means that investors will be taxed on potential profits even if they haven't sold their assets. Experts suggest that the tax rate could also reach 42%, applying not only to cryptocurrencies acquired after the law's enactment but also retroactively to assets obtained as far back as January 2009, when Bitcoin was launched.

Both countries are aligning their policies with the European Union's upcoming Markets in Crypto-Assets Regulation (MiCA), which aims to standardize cryptocurrency rules across member states. The proposed bills are expected to be introduced in 2025, reflecting a broader trend toward stricter oversight of the rapidly evolving cryptocurrency market. Investors should prepare for these changes as Europe moves toward more comprehensive regulation of digital assets.