Author: Lucrezia Miano
Cryptocurrencies are transforming the global financial landscape, attracting more investors, innovators and enthusiasts. However, as this sector grows, tax regulations become a crucial element to understand and comply with. In Italy, the taxation of cryptocurrencies is regulated by specific laws that aim to ensure tax transparency and compliance, while maintaining some complexities that can disorient the less experienced. This article will help you navigate the jungle of Italian regulations, providing essential information on earnings, accounting methods and reporting requirements. Whether you’re an experienced investor or a newbie, here’s everything you need to know.
Taxation of Cryptocurrencies in Italy
In recent years, Italy ha made great strides in regulating the cryptocurrency market, realizing the growing interest and rapid spread of these digital assets. However, the taxation of cryptocurrencies remains a complex issue that raises many questions among investors and technology enthusiasts. In this article you will find a clear and detailed overview of the Italian tax regulations regarding cryptocurrencies.
Do you have to pay taxes on cryptocurrencies in Italy?
Yes, cryptocurrencies are taxed in Italy. According to the regulations of the Revenue Agency, earnings from cryptocurrencies are classified as "different income" and taxed at 26% for amounts exceeding 2,000 euros. However, starting in 2026, the tax rate will increase to 33%, as established by the 2025 Budget Law. Alternatively, it will be possible to opt for a tax rate of 18% on the value of assets as at 1 January of the fiscal year.
How does the taxation of cryptocurrency earnings work?
In Italy, the capital gain is considered material for tax purposes when a "sale event" occurs, which includes:
• The conversion of cryptocurrencies into euros or other fiat currencies.
• The purchase of goods or services using cryptocurrencies.
• The exchange between cryptocurrencies of different nature (for example, Bitcoin for NFT).
Exchanges between cryptocurrencies with similar features and functions are exempt from taxation. In order to calculate earnings, the purchase price (including any commission) must be subtracted from the sale price. If losses occur, they may be offset against earnings for up to four consecutive tax years.
Accounting methods and reporting requirements
The IRS recommends using the Last In, First Out (LIFO) method to determine the cost of cryptocurrencies sold. For example, the value of most recently purchased cryptocurrencies will be used as a cost basis in calculating earnings.
Italian tax residents must also declare their digital assets in the RW Framework of the income tax return, including those held abroad or in personal portfolios. A 0.2% capital tax is levied annually on the value of assets at year-end.
Special tax regimes
Some types of cryptocurrency-related activities, such as mining, staking and the sale of NFTs, are subject to special tax regimes. For example:
• Mining is taxable as "different income" at 26%, unless it is carried out as a professional activity.
• Staking follows similar rules, but commissions withheld by providers are not deductible.
• NFTs representing intellectual property may be taxed as professional or other income, depending on the nature of the activity.
Tax Incentives for New Residents
To attract investment, Italy offers tax incentives to new residents, including a flat tax of 100,000 euros on foreign income, applicable also to earnings from cryptocurrencies held abroad.
Conclusion
In a rapidly changing world like cryptocurrencies, being informed about tax regulations is crucial to investing and trading with confidence. Italy, with specific rules and incentives for new residents, offers a framework that may seem complex, but that with the right guidance and planning can be addressed without fear. Whether you’re looking to optimize your tax returns or exploring new opportunities, consulting a professional is always a winning choice. Navigating the tax landscape of cryptocurrencies in Italy can be complex, but understanding the rules is essential to avoid problems with the tax authorities and optimize the management of your digital wallet. You should always consult a professional to ensure that you are fulfilling your tax obligations correctly.
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