Bitcoin and Taxes, PUBLISHED:
Estimated reading time: 4 minutes
by Jacqueline Facconti
The Bitcoin and tax return issue is a bit chaotic in Italy like taxation. Do cryptocurrencies have to be declared in the tax return or not? Are they subject to taxation? Those who do not have clear ideas about this should contact an accountant or reliable and consolidated platforms that provide precise tax indications and instructions based on the regulations of each individual country.
The question of Bitcoin And tax declaration it’s a bit chaotic in Italy like taxation. Do cryptocurrencies have to be declared in the tax return or not? Are they subject to taxation? Those who do not have clear ideas about this should contact an accountant or reliable and consolidated platforms that provide precise tax indications and instructions based on the regulations of each individual country. For small investments, it is preferable to rely on the best platforms that can also support users from a fiscal point of view. To date, in Italy there is no specific Bitcoin tax law on which the general legislation for foreign currencies applies. Few, however, use BTC as coins rather than as an investment. To hold cryptocurrencies, there are exchange platforms (such as Coinbase) but also wallets or apps (a sort of virtual safes). Formally, it is neither an investment nor a bank deposit, so the 26% rate to be paid in case of profits would not be applicable. Confusion still reigns in our country. Here’s how to fill out the tax return in case of investments in BTC and cryptocurrency in general.
Bitcoin and tax returns: look at the RW Framework
The investments in Bitcoin and cryptocurrency must be indicated in RW part of the tax return. Those who buy Bitcoin must indicate the value of the transaction in this context, but this is not an obligation that applies to everyone. If you hold and buy crypto with a private key or using a private wallet (electronic wallet), you are not required to indicate your assets on the tax return. The indication is mandatory if you use an exchange or wallet with tax residence abroad. In this specific case, you must indicate the value of your purchases in BTC and crypto in the RW Framework. It was the Revenue Agency that provided this information.
Bitcoin: how are earnings taxed?
The Fisco also clarified the details of the taxation of Bitcoins and cryptocurrencies for income tax purposes. The general principles relating to transactions with traditional currencies apply in the case of holding of virtual currencies by natural persons (not of business activities) or in the case of digital currency conversion. Typically, spot sales of crypto do not constitute taxable income because they lack the speculative purpose. The situation changes if the currency is sold by withdrawing from wallets with an average stock exceeding € 51,645.69 for at least 7 continuous working days in the tax period (Article 67, paragraph 1, letter c-ter), of the TUIR approved with DPR n. 917 – December 22, 1986). In summary, for cryptocurrencies kept in the portfolio, nothing is owed to the taxman. It will be enough to indicate its value in the tax return to Panel RW. If, on the other hand, they are sold, the Inland Revenue ‘beats cash’. The taxpayer who holds Bitcoin or other cryptocurrencies for a value of at least € 51,645 for over 7 days will have to pay 26% on any gains made from the sale. If the value of the cryptocurrencies is less than this amount, no taxes are paid.
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