While cryptocurrencies (criptovalute in Italian) such as bitcoin and ethereum have been growing in popularity the last few years, the question regarding how cryptocurrency as an asset class should be taxed is something all countries need to consider. In this complete tax guide for Italy, you will learn everything you need to know about how cryptocurrencies are taxed in Italy, how much tax you must pay on your crypto gains, and how to report your crypto taxes to the Italian Tax Administration, Agenzia Entrate.
Just a heads up! This guide is quite extensive due to the complex nature of cryptocurrency taxes. While we recommend reading this guide from A to Z the first time to make sure you don’t miss out on anything important, you can also use the menu navigation on the right side to jump to any specific crypto tax question later.
We are also updating this guide regularly based on the latest tax guidelines and statements from Agenzia Entrate. All updates will be listed below so that you can quickly see if anything has been updated since your last visit:
- August 30, 2022: The first version published
Let’s start with the most important question of all…
Is cryptocurrency taxed in Italy?
Yes – profits from selling, exchanging, or disposing of cryptocurrencies are taxed at a flat rate of 26% in 2022. However, this applies only if your cryptocurrency portfolio’s total value exceeds €51,645.69 for more than seven consecutive days during the tax year.
How is crypto taxed in Italy?
The Italian Tax Administration has been rather reluctant with regard to providing official tax guidance on the topic of cryptocurrency taxation. However, two resolutions issued by Agenzia Entrate in the past are currently being used to form the basis for how cryptocurrencies are taxed in Italy.
According to Resolution no. 72 /E/2016, profits from trading cryptocurrencies are not considered taxable income due to the lack of speculative nature. However, if the person’s total wallet or account balance exceeds €51,645.69 for a minimum of seven consecutive days during the tax year, the profits are taxed as capital gains at a flat rate of 26%.
While this resolution was issued in 2016, it still holds legal ground considering Agenzia Entrate is yet to issue new tax guidance replacing or altering the previous statements. The latter statement regarding the €51,645.69 limit was mentioned in Resolution no. 788/2021. Here is the original quote from Agenzia Entrate:
Conseguentemente, le cessioni a termine di valute virtuali rilevano sempre fiscalmente, mentre le cessioni a pronti generalmente non danno origine a redditi imponibili mancando la finalità speculativa, salva l’ipotesi in cui la valuta ceduta derivi da prelievi da portafogli elettronici (wallet), per i quali la giacenza media superi un controvalore di euro 51.645,69 per almeno sette giorni lavorativi continui nel periodo d’imposta (…)Agenzia Entrate
This is good news for all Italian crypto investors considering you are not paying taxes on your profits as long as your total portfolio value does not exceed €51,645.69 for seven or more consecutive days.
While Agenzia Entrate has not made any statements regarding a new cryptocurrency tax policy to the best of our knowledge, it is expected that the tax agency will publish more detailed guidance in the future considering the current resolutions do not clarify how all different ways of interacting with cryptocurrencies – such as staking, DeFi, or NFTs – should be taxed. We are keeping a close eye on the tax development in Italy and will update this guide regularly when official statements or new guidelines are published by Agenzia Entrate.
Tax rates in Italy
The two most important taxes to consider for Italian taxpayers are Personal Income Tax and Capital Gains Tax. Let’s look at both in more detail.
Personal Income Tax
The main income tax in Italy is the Personal Income Tax, also known as “Imposta sui redditi delle persone fisiche” (IRPEF). The income tax is comprised of three different taxes:
- National income tax
- Regional income tax
- Municipal income tax
The national income tax makes up the majority of the total tax that Italian taxpayers need to pay. The tax rates are progressive and vary between 23% and 43% depending on the taxable income amount. The more you earn, the more you pay in taxes – much similar to other European countries today.
The Personal Income Tax rates on a national level for 2022 are as follows:
|Taxable income||Tax rate|
|€0 – €15,000||23%|
|€15,001 – €28,000||25%|
|€28,001 – €50,000||35%|
The regional income tax is levied on a regional level and varies between the different regions in Italy. The current regional income tax rates vary between 1.23% and 3.33%.
Lastly, we have the municipal income tax. As the name suggests, this tax is levied on a municipal level where you are considered a resident and the current tax rates vary between 0% and 0.9%.
Capital Gains Tax
Generally speaking, if you own an asset for investment or speculative purposes that you later sell, you will make either a capital gain or capital loss. Assets subject to capital gains taxation in Italy are stocks, bonds, and cryptocurrencies to mention a few. Until 2018, capital gains in Italy were taxed differently based on if the asset sold was classified as a ‘Qualified shareholding’ or a ‘Non-qualified shareholding’.
However, effective from January 1st, 2019, all capital gains are considered equal for tax purposes and are subject to a flat tax rate of 26%. This means that you will pay a 26% tax on your profits from cryptocurrencies.
How to calculate capital gains in Italy
Selling, exchanging, or otherwise disposing of a cryptocurrency generates a capital gains event and you need to calculate the resulting capital gain or capital loss. First, you need to determine both the sales price (proceeds) and the purchase price (cost basis) of the cryptocurrency sold. The selling price is simply the value of the cryptocurrency sold at the time of the transaction in euros. The purchase price should be determined using the Last-in First-out (LIFO) accounting method rather than FIFO which is used in most other countries. The LIFO method implies that the latest acquired coins are sold first if you have acquired a cryptocurrency on more than one occasion before selling the same cryptocurrency later.
You should also add any directly related trading fees to the purchase price so that the fees are deducted from the resulting gains. A crypto tax calculator such as Coinpanda will include the fees in the calculations automatically so that you are not paying more tax than you should!
Let’s look at an example to better understand how to calculate capital gains from transactions with cryptocurrencies.
Roberto bought 0.2 BTC for €7,500 in December of 2021. Two months later, in February of 2022, he buys 0.3 BTC for €10,000. Roberto owns now 0.5 BTC which he has paid a total of €17,500 for.
In March of 2022, Roberto decides to sell 0.4 BTC while keeping 0.1 BTC as a long-term investment. He sells 0.4 BTC and receives €20,000 in exchange. His transactions can be seen in the table below:
The first thing Roberto needs to do is to calculate the acquisition price of the 0.4 BTC sold using the FIFO method: €10,000 + 0.1 / 0.2 * €7,500 = €13,750.
Since we know the sales price was €20,000, we can find the resulting capital gains directly: €20,000 – €13,750 = €6,250.
The resulting table will look like this:
If Roberto’s total portfolio value exceeded €51,645.69 for more than seven consecutive days during 2022, he needs to pay 26% tax on the gains: €6,250 x 26% = €1,625.
Cost basis method Italy
The cost basis method to be used in Italy is Last-in First-out (LIFO). This accounting method assumes that the earliest acquired units are being sold first.
This is what the Italian Tax Administration said in Resolution no. 788/2021:
Tenuto conto che, ai sensi dell’articolo 67, comma 1-bis, del Tuir ai fini della determinazione delle plusvalenze/minusvalenze, si considerano cedute per prime le valute acquisite in data più recente; per determinare la plusvalenza conseguente a prelievi da wallet, che abbiano superato la predetta giacenza media, si deve utilizzare il costo di acquisto considerando cedute per prime le valute acquisite in data più recente.Agenzia Entrate
A crypto tax calculator such as Coinpanda supports the LIFO accounting method that should be used for calculating capital gains on cryptocurrencies in Italy.
Is buying cryptocurrency taxed in Italy?
Buying cryptocurrency with euros or other fiat currency is not a taxable event in Italy. This is because no cryptocurrency is either sold or disposed of.
Buying cryptocurrency with fiat currency
Simply buying cryptocurrency with fiat currency is not taxed according to the current tax rules. Keep in mind that you should keep track of your purchases because you need this information to calculate the profits or losses when you sell the coins at a later time.
Buying crypto and paying with another crypto
Buying one cryptocurrency and paying with another cryptocurrency is taxed in Italy and you have to calculate the resulting capital gains for the currency that is sold. You will pay 26% tax on the profit – but only if your total portfolio’s value exceeds €51,645.69 for seven consecutive days or more during the tax year.
Is selling cryptocurrency taxed in Italy?
Yes – selling cryptocurrency is always considered a taxable event and you have to calculate the realized gains on the currency sold. This includes also stablecoins which are considered equal to other cryptocurrencies from a tax perspective.
Selling cryptocurrency for fiat currency
Selling or exchanging cryptocurrency for fiat currency such as the euro or US dollar is considered a taxable disposal by Agenzia Entrate and you need to calculate the gains on the currency sold. To find the gains, you need to calculate the purchase price (cost basis) of the currency sold and then subtract this from the sales price. Profits are then taxed at a 26% flat rate – but only if the total value of your portfolio exceeds €51,645.69 for seven consecutive days or more during the tax year.
Selling crypto for another crypto
Selling crypto for another crypto is similar to buying crypto for another crypto and is therefore a taxable event and you need to pay 26% flat tax on the profits.
Crypto mining taxes Italy
To the best of our knowledge, no official statement with regards to how rewards from cryptocurrency mining should be taxed has been issued by Agenzia Entrate. The two published resolutions address the general tax implications for businesses and natural persons dealing with cryptocurrencies, but do not mention mining specifically.
However, it is rather unlikely that mining rewards are tax exempt, and the safest approach is most likely going to be reporting mining rewards as general income in the annual tax return. This is also in line with how mining rewards are taxed in most other countries today.
Taxes on crypto staking rewards
Similar to mining rewards, no specific mention of how cryptocurrency staking rewards are taxed can be found in the published resolutions by Agenzia Entrate. However, we believe the most correct and safest approach is to report staking rewards as general income similar to mining rewards in your personal tax return.
How are airdrops taxed in Italy?
Similar to mining and staking rewards, no specific tax guidance exists yet that clarifies how cryptocurrency airdrops are taxed. The safest approach is likely to report all airdrops of non-negligible value as general income in your tax return.
We will update this guide with more information later if Agenzia Entrate publishes updated guidance that includes also the tax treatment of airdrops.
Receiving salary in a cryptocurrency
Being paid in cryptocurrency, either as a salary from employment or in exchange for services as a freelancer, is taxed similarly to being paid in euros or another fiat currency. This means that from a tax perspective, there is no practical difference in what type of currency you receive your compensation – the income amount will be taxed as income in all cases.
To calculate the income amount in euros at the time of receipt, you can use cryptocurrency prices from any reputable exchange – or let Coinpanda handle all the calculations automatically for you!
How to calculate crypto taxes in Italy
If you are an Italian taxpayer and have transacted with cryptocurrency during 2022, you need to calculate the realized gains and income from all transactions. There are essentially two different ways to go about this – either manually or using a crypto tax calculator.
Let’s look at both methods:
Calculating your crypto taxes manually
Here are the steps you must take to calculate your crypto taxes manually:
- Download the transaction history from all exchanges where you have bought, sold, received, or sent any cryptocurrency. This includes also transactions from or to your own wallets.
- Calculate the cost basis for every individual transaction where cryptocurrency is disposed of
- Calculate the proceeds and resulting capital gains for all transactions that are considered taxable disposals by Agenzia Entrate
- Identify all transactions subject to income tax by Agenzia Entrate
- Summarize the calculations to find the total taxable amount during the financial year
Calculating your crypto taxes using crypto tax software
The best option for most people in Italy is likely going to be using cryptocurrency tax software to automatically do the required calculations. If you want to save both time and money, here is how you can use Coinpanda to sort out your crypto tax situation and generate all the required tax reports automatically:
1. Sign up for a 100% free account
It is 100% free to create a Coinpanda account and you don’t need to enter any credit card information to get started. The free plan lets you explore and use all features for free.
2. Connect all your exchange accounts and wallets
Coinpanda supports more than 500+ exchanges, wallets, and blockchains today. You can easily import all your transactions by connecting your exchange accounts with API keys or by uploading a CSV file with the transaction history. If you find that Coinpanda does not support an exchange you have used, reach out to us so we can add the integration – usually within a few days.
3. Wait for Coinpanda to crunch all the numbers
Get yourself a cup of your favorite beverage and wait for Coinpanda’s sophisticated calculation engine to crunch all the numbers for you. Coinpanda will automatically calculate the cost basis, proceeds, capital gains, and taxable income for all your transactions! This might take anywhere from 20 seconds to 5 minutes depending on how many transactions you have.
4. Check for any reported warnings
Coinpanda will automatically display a warning if it appears that one or more transactions are missing such that the cost basis calculations will not include the total purchase price. If you see any warnings, you should first double-check that you have in fact connected all your wallets and exchange accounts.
Do you still see any warnings? Fear not! We have written an extensive list of help articles that will guide you through the entire process of making sure your crypto tax reports are as accurate as possible. If you still need any help, the best way to get in touch with our customer support and tax experts is through the Live Chat.
5. Download your tax reports and tax forms
When you have successfully imported all transactions, the final step is to download the tax reports you need to file your taxes in Italy. Coinpanda’s tax plans start at $49 and you have lifetime access to all reports after upgrading.
Crypto tax deadline in Italy
The tax year in Italy runs from January 1 to December 31 each year. Your crypto taxes should be reported in your personal tax return where you also report ordinary income from employment.
The deadline for filing your personal tax return depends on which tax return you have to file:
- Modello 730 – September 30th, 2022
- Modello Redditi PF – November 30th, 2022
The Mod. 730 tax return is a simplified income tax return that applies only to Italian residents meeting certain requirements. If you have to report profits from cryptocurrencies in your tax return, you should file Mod. Redditi PF rather than Mod. 730 and the deadline is November 30th, 2022.
How to report crypto taxes in Italy
After calculating your capital gains and income for all transactions during the tax year, the last step is to report your crypto taxes in your personal tax return before the deadline on November 30 the following year.
Since Mod. 730 is a simplified income tax return, you should most likely file Mod. Redditi PF instead where you need to report both your taxable income from cryptocurrencies and also your net worth.
The easiest way to file your taxes is using the online portal Fisconline. If you have further questions about how to access the online portal or how to file your taxes, we recommend contacting Agenzia Entrate or a tax advisor in Italy directly.
Which records may Agenzia Entrate ask for?
There is currently no official list of records or bookkeeping details that Agenzia Entrate may ask you to provide for cryptocurrency transactions in case of a tax audit. However, as a general rule, you should keep records of the following details for each transaction as a minimum:
- The date of the transaction
- The cryptocurrencies involved in the transaction
- Type of transaction
- How much was bought, sold, or exchanged
- The value of the cryptocurrency in euro at the time of the transaction
- Exchange records and other relevant statements
You should periodically take backup of these records from all exchanges you have traded on since many exchanges keep these records for a limited time only – or the exchange itself may cease to exist in the future. You can also use a cryptocurrency tax app like Coinpanda to generate a report with all this information automatically.