NEW TAX REGIME FOR CRYPTO-ASSETS: OPPORTUNITIES AND CHOICES FOR TAXPAYERS

0

The 2023 Budget Law introduced changes to the taxation rules for “crypto-assets” to align the tax legislation with the evolution of different types of assets within the system. The Italian Tax Authority has made available, for public consultation until June 30, 2023, a draft circular providing clarifications on the taxation rules for crypto-assets, highlighting the clear deadline of January 1, 2023, marking the transition between the old and the new tax regime for crypto-assets. Specifically:

  • Until December 31, 2022, the interpretations provided for tax periods before 2023 are confirmed. According to these interpretations, the general provisions of the foreign currency tax regulations specified in Article 67, paragraphs 1, 1-bis, and 1-ter apply to operations involving virtual currencies. This means that “forward” sales are always subject to taxation, while “spot” sales are relevant only if the sold crypto-asset derives from withdrawals from a wallet and has an average balance exceeding the equivalent of €51,645.69 for at least seven consecutive working days within the tax period.
  • Starting from January 1, 2023, the tax regime for crypto-assets for non-business entities is governed by Article 67, paragraph 1, letter c-sexies of the Italian Income Tax Consolidation Act (TUIR), which was introduced by Law 197/2022. This provision classifies “capital gains and other profits derived from reimbursement or onerous transfer, exchange, or holding of crypto-assets, regardless of their denomination” as miscellaneous income of a financial nature. These profits are subject to a substitute tax rate of 26%. Taxpayers can choose among the “declarative regime,” the “administered regime,” and the “managed savings regime” for the application of the tax.

The current regulation also provides that:

  • Such incomes are not subject to taxation if they are collectively below €2,000 within the tax period, considering both capital losses and gains.
  • If the overall amount of capital losses and financial losses exceeds the overall amount of capital gains and other incomes, the excess can be deducted, up to the extent of capital gains and other incomes, from the gains and incomes of subsequent tax periods, but not beyond the fourth period, provided it is indicated in the income tax return relating to the tax period in which the capital losses and financial losses were incurred.
  • In any case, the exchange between crypto-assets with the same characteristics and functions does not constitute a fiscally relevant event.

Regarding the tax monitoring regulations, the current wording of Article 4 of Decree-Law 167/90 requires the completion of the RW form for individuals, partnerships, and non-commercial entities holding crypto-assets.

However, opting for the optional regimes of “administered savings” and “managed savings” allows taxpayers to be exempt from the obligation of tax monitoring concerning the incomes derived from the holding of crypto-assets.