Italy Imposes 20% Tax On All Wire Transfers, Bitcoin Unaffected

February 16, 2014

An Italian news site reports the shocking decision by the government of Italy to impose a 20% withholding tax on all inbound wire transfers to Italian citizens. All international payment systems linked to a bank account, such as PayPal, Western Union and, of course, bank wires will be affected.

This brutal tax, combined with already steep fees on legacy money transmission methods, could claim up to a third of the value of international transfers.

Citizens may contact the relevant bureaucracy to plead for the return of their money, provided they can prove it to be outside the category of “income.”

It seems likely this ruling will have all kinds of unintended consequences, with many Italians forced to open foreign bank accounts or switch to Bitcoin to conduct their regular business.

To our Italian friends, we would suggest the BitcoinTalk Italian sub-forum for discussion of Bitcoin in Italian, or the Italian LocalBitcoins page to acquire Bitcoin.

Quite what the government of Italy hopes to achieve with this tax is unclear. Certainly, less money will flow into Italy and many businesses and lives will be disrupted. The net economic effect is likely to be negative as Italians emigrate, close their businesses or find other ways to avoid the tax.

Italy also recently put a €1,000 legal limit on cash payments. Such drastic moves, combined with the seizure of funds in Cyprus and the ongoing discussion of further bail-ins across the Eurozone, suggests a grim economic future for Europeans under the lash of central banks.

Although this news is unlikely to spur any immediate rise in the Bitcoin price, given the market is primarily focused on tomorrow’s announcement from Mt. Gox, it does suggest Bitcoin will become more valuable over the long-term as people strive to preserve their wealth from government confiscation.

Last modified (UTC): February 16, 2014 20:50

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