Italy: the 2023 finance law on crypto

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The new Italian Budget Law 2023 introduced a number of new retroactive (!) tax obligations for Italian residents holding cryptocurrencies.

The law stipulates that cryptocurrencies are no longer assimilated to foreign currencies, with the correlative obligation to register them in the RW form, introducing among miscellaneous income a new taxable fact that includes capital gains and other income from the sale of crypto-currencies, if they exceed 2,000 for each fiscal period, realized by the redemption, sale, exchange or holding of crypto-assets.

On the other hand, the exchange between crypto-currencies having the same functions is not taxed. Thus, despite the lack of clarity of the regulatory provision, one could assume that if a person sold BTC against ETH, realizing a capital gain, this taxation will be deferred, whereas if a person sold BTC against a stablecoin, considering that the stablecoin does not have the same function as the bitcoin, the transaction will be subject to taxation.

Capital gains are subject to a 26% substitution tax

The tax treatment of crypto in Italy

The possibility for holders of crypto-assets to revalue the value of their crypto-currencies on January 1, 2023 to the current value by paying a substitute income tax at the rate of 14% instead of 26% has also been introduced.

Therefore, those who hold cryptocurrencies should take advantage of this option, practically increasing the taxable price and thus saving 12% in tax. This tax can be paid in one installment until June 30, 2023 or in three equal installments, remunerated on the installments following the first at the rate of 3% per year.

In the event that the taxpayer has not declared his crypto-assets when completing the RW form, he will still be required to pay a reduced amount of 0.5% (for each year) on the value of the crypto-assets not declared. assets if he has not earned any income during that tax period.

On the other hand, in the event that the taxpayer has earned income during the tax period, he will have to file the request with the Italian tax authorities (Agenzia delle Entrate) and pay a replacement tax amounting to 3.5% of the value of the crypto-assets held at the end of each year or at the time of realization, as well as an additional amount equal to 0.5% for each year of the aforementioned value as penalties and of interests.

With regard to the payment of taxes on capital gains, the rule introduced the possibility for holders of crypto-assets on deposit with resident financial intermediaries to opt, as an alternative to the ordinary declaration regime, for the so-called regime of “administered savings”. or the so-called “managed savings” scheme.

Finally, it should be noted that the legislator intended to extend the scope of application of stamp duty, at the rate of 2 per thousand per year on the value of assets, also for transactions – held with resident financial intermediaries – having as having crypto-assets as their object and entailing possible periodic communication obligations to customers, even in the event that no communication is sent or drafted.

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