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In 2024, the Revenue Agency has updated the RW framework in the Income Model PF to align with the new provisions of the 2023 Budget Law, introducing a dedicated section for cryptocurrencies.
This guide aims to provide simple and clear instructions on how to correctly declare cryptocurrencies.
Accurate completion of the RW framework in the Income Model PF is crucial for fulfilling tax obligations and ensuring compliance with current regulations.
The RW Framework is part of the Income Model PF 2024 used to declare foreign investments and financial assets held by individuals, non-commercial entities based in Italy, and simple partnerships.
It serves as the form for anyone possessing cryptocurrencies, regardless of whether they were bought, sold, or kept on Italian or foreign exchanges.
Besides providing information on foreign-held assets, the RW framework enables calculation of wealth taxes IVAFE (Tax on the Value of Financial Assets held Abroad) and IVIE (Tax on the Value of Real Estate held Abroad).
Properly filling out the RW Framework ensures taxpayers present a comprehensive view of their international financial and asset holdings, including cryptocurrencies, which promotes transparency and tax compliance while avoiding potential penalties or legal issues from failure to declare foreign financial assets.
To fill out the RW framework, consider the entire duration of the financial relationship, indicating starting and ending values for the holding period.
For financial movements during the tax year, such as transfers of securities or advance payments, it is essential to indicate holding values before and after the contribution, according to Circular No.
16/E/2016.
If trading activities occur daily, it is possible to simplify the completion of the RW framework using a summary statement of transactions.
However, this simplification does not apply to taxable incomes, which must be reported in specific parts of the income tax return.
Values to be entered in the RW Framework must be calculated analytically, following the provisions of the Consolidated Income Tax Act (TUIR).
List the quantity of each cryptocurrency acquired, held, or sold during 2023.
These calculations will verify the correct value to be reported in the tax declaration, as the obligation to complete the RW Framework remains even if all cryptocurrencies were sold in 2023.
The completion of the RW framework is mandatory for individuals and entities specified in Article 4 of Decree Law No.
167/90, including holders of investments and financial assets abroad.
In Italy, this includes non-commercial entities, simple partnerships, and individuals.
Specific instances requiring completion of the RW framework involve fund and investment managers, foreign asset holders, and Italian-resident trusts.
Not all taxpayers owning cryptocurrencies or other assets need to fill out the RW framework.
Exemptions apply to commercial entities, certain partnerships, and those making foreign investments through Italian companies.
In conclusion, consistent awareness of your responsibilities regarding the RW Framework is essential to ensure compliance with tax laws while managing your cryptocurrency investments effectively.
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