Taxes on Bitcoin and Crypto, how much do you pay and how? Declaration guide

The taxation of Bitcoin and cryptocurrencies in Italy is governed by the 2023 Budget Law.
But how much do you pay and how? In this guide to the 2024 declaration we see how taxation on Bitcoin has changed, how the capital gain is calculated in light of the new exemption threshold (set at 2,000 euros), what are the different cases in which operations with Bitcoin or other cryptocurrencies activities are fiscally relevant (from staking to buying NFTs) and how not to pay taxes on Bitcoin, respecting the law.
Bitcoin taxation: complete guide Bitcoin taxation: how much do you pay in taxes? Bitcoin taxation: how are taxes paid? Bitcoin taxation: when should taxes be paid? How not to pay taxes on Bitcoin Tax monitoring of Bitcoin and other cryptocurrencies (RW framework) Stamp duty on Bitcoin and cryptocurrencies How to simplify the tax management of Bitcoin and Crypto Bitcoin taxation: how much do you pay in taxes? The taxation of Bitcoin and capital gains from crypto-assets in Italy is subject to a 26% tax for natural persons, non-commercial entities, simple and similar companies, and non-resident subjects without a permanent establishment.
However, this rate only applies to capital gains above an allowance of 2,000 euros.
According to the Tax Office, if this threshold is exceeded, the tax will be paid only on the excess portion and not on the entire profit made.
The 2023 Budget Law establishes that cryptocurrencies are among the financial instruments that generate different incomes, subject to substitute tax only in the presence of capital gains.
Furthermore, the law establishes that taxation is not determined by possession, but by tax-relevant transactions, such as the sale of cryptocurrencies, the purchase of goods or services and the purchase of NFTs via cryptocurrencies.
The calculation of the tax takes into account the taxable base, calculated on the cumulative result of all operations and after having offset any capital losses.
Income derived from staking and other crypto-asset income operations are included in income taxed at 26%, called "income from holding crypto-assets".
Let's take an example.
Suppose an investor recorded these operations: February 1, 2023: purchase of 1 Bitcoin for 21,000 euros; March 1, 2023: purchase of 1 Bitcoin for 22,000 euros; April 10, 2023: sale of 1 Bitcoin for 27,000 euros.
To calculate the capital gain with the LIFO method, the cost of the most recently acquired Bitcoin is subtracted from the value of the sale.
So, in our example: Capital gain = 27,000 euros – 22,000 euros = 5,000 euros Taxable capital gain net of the deductible = 5,000 euros – 2,000 euros = 3,000 euros Bitcoin tax = 3,000 euros x 26% = 780 euros It is important to remember that the income deriving from crypto-assets produced in Italy, when the activity is carried out in the territory of the State or if the assets are located in this territory.
Income from crypto-assets held in Italy with resident service providers or intermediaries also falls under the new regulations.
Bitcoin taxation: how are taxes paid? Taxes on Bitcoin must be paid through the 2024 tax return.
In particular, capital gains on crypto assets must be indicated in Tables RT and RW of the PF Income Model, necessary for tax monitoring and payment of IVAFE.
The payment of taxes on capital gains must take place by the ordinary income tax payment deadline, set for 30 June.
To make the payment, use the F24 form indicating the corresponding tax code: Tax code 1100 – Substitute tax on capital gains referred to in art.
67, paragraph 1, letter.
from c-bis) to c-quinquies) of the TUIR.
In the tax year field, the reference year of the declaration must be indicated, in order to correctly associate the tax paid with the capital gains relating to that year.
Bitcoin taxation: when should taxes be paid? One of the most complicated issues of Bitcoin taxation is when taxes should be paid.
To answer this question, a distinction must be made between tax-relevant and non-tax-relevant crypto assets.
The fiscally relevant activities include: Conversions from crypto-assets to fiat even without withdrawing the latter.
Conversions from crypto-assets to fiat on any Italian or foreign exchange or wallet.
Conversions from crypto-assets of one type to crypto-assets of another, such as buying or selling NFTs with cryptocurrency, or exchanging a crypto-asset for stablecoins (e-money tokens).
Purchases of goods or services with crypto-assets.
Tax-relevant activities do not include: Conversions from crypto-assets to crypto-assets of the same type, for example from BTC to ETH, or an NFT to another NFT.
In fact: "The exchange between crypto-assets having the same characteristics and functions does not constitute a fiscally relevant case".
In other words, the Revenue Agency believes that the exchange of a cryptocurrency with an asset-referenced token is fiscally irrelevant.
read also Cryptocurrencies: when they should be declared (and when not) The payment of taxes on Bitcoin or other crypto assets takes place at the same time as income taxes during the presentation of the tax return.
It is vital to be aware of specific payment deadlines and comply with tax obligations on time to avoid penalties or late payment interest.
The first deadline for paying taxes on Bitcoin is therefore June 30th of the year in which the declaration is submitted.
However, the taxpayer has time to regularize his position until 30 November 2023, as well as 28 February 2024, the deadline for sending the tax return and the RW Framework relating to the crypto-assets held as of 31 December 2022.
read also Cryptocurrency stamping, what is it and how to do it? Expires November 15 How not to pay taxes on Bitcoin The 2023 Budget Law has introduced an interesting opportunity to avoid paying taxes on Bitcoin and cryptocurrencies, establishing an exemption threshold of 2,000 euros for capital gains in the tax year.
This provision constitutes an exception to article 67, paragraph 1 of the TUIR, aiming not to tax income of limited amounts.
However, it is crucial to accurately report cryptocurrency earnings, as undeclared cryptocurrencies can result in fines ranging between 3% and 15% of the undeclared amount.
So, while the new law offers an advantage for capital gains below the established threshold, correct and transparent reporting remains essential to avoid unwanted financial consequences.
read also Cryptocurrencies: how to pay less taxes Tax monitoring of Bitcoin and other cryptocurrencies (RW framework) Completing the RW framework is mandatory only if the cryptocurrencies are stored in a digital wallet located abroad or if they are stored on devices such as USB sticks or computers.
This process is part of the regulatory framework that ensures the transparency of transactions and the correct application of taxes, ensuring that crypto-assets are correctly considered for tax purposes, especially in international contexts or for storage on external media.
Monitoring must be done even in the absence of direct taxes on the possession of cryptocurrencies, to ensure transparency and comply with tax regulations.
It is important to record the value of the cryptocurrencies owned and fulfill any declaration obligations established by current legislation.
Even if the average balance does not exceed 15,000 euros, it is necessary to fulfill the tax monitoring obligations by completing the RW form, following the instructions provided by the Revenue Agency: column 1: indicate 1 to report the property; column 2: leave empty; column 3: insert code 14 (other foreign assets of a financial nature and virtual currencies); column 4, relating to the foreign state: empty; column 5: indicate 100 if you own 100% of cryptocurrencies; column 6: indicate 1 if the reference value is the market value; columns 7 and 8: enter the amount of the cryptocurrency in euros at the value of 31 December of the previous year and that of 31 December of the reference year.
Cryptocurrency tax monitoring is a crucial aspect of ensuring transparency and compliance in digital transactions.
Keeping track of the value of cryptocurrencies owned and following the guidelines provided by the Revenue Agency will help avoid tax penalties and legal problems in the context of cryptocurrencies.
Ensuring you properly comply with reporting obligations will help maintain a regulated environment and ensure responsible financial management of cryptocurrencies.
Stamp Duty on Bitcoin and Cryptocurrencies Once crypto-assets have been correctly declared, they become subject to stamp duty.
Similar to other financial instruments, a rate of 0.2% will apply to their value at the end of the year.
How to simplify the tax management of Bitcoin and Crypto As we have seen in this guide, it is not easy to manage the tax aspects related to the light of the new legislation: typically, due to the very nature of the instruments, purchases are carried out on several occasions, on different platforms and even very different prices for the same assets.
For anyone who is not limited to a few operations a year, the use of specialized software, possibly integrated with the exchange used for their operations, becomes essential.
In this sense, an interesting novelty has been announced by the Cryptosmart exchange which also has the advantage of being managed by a totally Italian team with Italian registered office and regulations.