How to Pay Taxes on Crypto Income in Italy: Your Complete 2024 Guide

Understanding Crypto Taxation in Italy

Italy treats cryptocurrency as a financial asset, meaning all crypto-related income is subject to taxation. Whether you’re trading Bitcoin, earning from staking, or receiving NFT airdrops, the Agenzia delle Entrate (Italian Revenue Agency) requires declaration. Non-compliance can lead to audits and penalties of 90-180% of unpaid taxes. This guide breaks down Italy’s crypto tax rules for 2024.

How Crypto Income Is Taxed in Italy

Italy applies two primary tax frameworks to cryptocurrency:

• Capital Gains Tax: 26% on profits from selling crypto held for less than 12 months. Losses can offset gains.
• Income Tax (IRPEF): Progressive rates (23%-43%) apply to crypto earned as:
  • Regular income (e.g., mining rewards)
  • Professional services payments
  • Staking rewards exceeding €5,000 annually

Note: No wealth tax applies to crypto holdings, only realized gains.

Types of Taxable Crypto Activities

You must report:

• Trading: Profits from buying/selling crypto-to-crypto or crypto-to-fiat
• Staking & Mining: Rewards valued at market price when received
• Airdrops & Hard Forks: Treated as miscellaneous income
• Crypto Payments: Salary or freelance income paid in crypto
• NFT Sales: Profits from non-fungible token transactions

Personal transfers between your own wallets aren’t taxable events.

Calculating Your Crypto Tax Liability

Follow these steps:

1. Track All Transactions: Log dates, values in EUR, and purposes using crypto tax software
2. Determine Cost Basis: Use FIFO (First-In-First-Out) method for acquisitions
3. Calculate Gains: Selling Price – Cost Basis – Transaction Fees = Taxable Gain
4. Apply Deductions: Offset gains with capital losses from other investments
5. Separate Income Types: Classify earnings as capital gains or ordinary income

Example: Buying 1 BTC for €20,000 and selling for €30,000 after 6 months incurs 26% tax on €10,000 profit = €2,600 owed.

Reporting and Payment Process

Declare crypto income in your annual Redditi PF tax return:

• Form RM: Report foreign exchange holdings (Section RW)
• Form RT: Declare capital gains (Schedule RT)
• Deadline: Submit by November 30 following the tax year
• Payment: Taxes due in two installments (June 30 & November 30)

Use certified Italian tax software or consult a commercialista (tax advisor) for complex portfolios.

Penalties for Non-Compliance

Failure to report crypto income triggers:

• 90-180% fines on unpaid taxes
• Interest accrual at 3.5% annually
• Criminal charges for evasion over €50,000
• Blocked financial accounts

The Revenue Agency accesses exchange data via international agreements like CRS.

Smart Compliance Strategies

Protect yourself with these tips:

• Keep detailed records for 10+ years
• Use tools like CoinTracking or Koinly for Italian tax reports
• Declare losses to reduce future tax burdens
• Consult experts before complex DeFi transactions
• Consider holding assets >12 months for tax-free appreciation

FAQs: Crypto Taxes in Italy

Is crypto taxed if I hold it long-term?

Assets held over 12 months are tax-exempt unless traded professionally.

Do I pay tax on crypto gifts?

Recipients pay no tax, but gifts exceeding €1,000,000 require donor declaration.

How are DeFi yields taxed?

Liquidity mining rewards count as income at receipt value.

Can I deduct crypto losses?

Yes, capital losses offset gains for 4 subsequent years.

Are stablecoins taxable?

Yes, all crypto-to-fiat conversions trigger capital gains tax.

What if I use a foreign exchange?

You must still declare income and report foreign holdings in Section RW.

Disclaimer: Tax laws evolve. Consult a qualified tax professional for personalized advice.