Understanding Bitcoin Taxation in Italy
In Italy, cryptocurrencies like Bitcoin are classified as “foreign currencies” or “financial assets” by the Agenzia delle Entrate (Revenue Agency). This means capital gains from crypto transactions are subject to taxation. Whether you’ve sold Bitcoin for profit, traded between cryptocurrencies, or earned through mining/staking, you must declare these gains in your annual tax return. Non-compliance can result in penalties of 120-240% of unpaid taxes plus interest.
Step-by-Step Guide to Reporting Bitcoin Gains
- Calculate Your Net Gain
Use this formula: Selling Price – Purchase Price – Transaction Fees = Taxable Gain. Track all transactions using crypto tax software or spreadsheets. Italy requires FIFO (First-In-First-Out) accounting method for cost basis calculation. - Determine Tax Rate
For individuals:- 26% flat tax on capital gains from trading
- Personal income tax (IRPEF) up to 43% for mining/staking income
- No tax if held for over 12 months? False! Italy has no long-term capital gains exemption for crypto.
- Complete Tax Forms
- Quadro RW: Report all crypto holdings as foreign assets (due by September 30th)
- Quadro RT: Declare capital gains/losses (Form RM for professional traders)
- Use Euro values at transaction time (refer to exchange rates from Banca d’Italia)
- Pay Taxes
Submit payment with your tax return by:- November 30th (electronic filing)
- September 30th (paper filing)
Special Cases and Exceptions
Tax-Free Threshold: None. All gains must be reported regardless of amount.
Losses: Can offset gains in the same year or carry forward for 5 years.
NFTs/DeFi: Treated similarly to cryptocurrencies.
Gifts/Inheritance: Subject to separate inheritance taxes above €1M exemption.
FAQs: Reporting Bitcoin Gains in Italy
- Q: Do I pay tax if I transfer crypto between my own wallets?
- A: No tax applies for transfers between wallets you own, but document the transaction.
- Q: How is staking income taxed?
- A: As miscellaneous income at your IRPEF rate (23%-43%), not the 26% capital gains rate.
- Q: What if I used a foreign exchange?
- A: You must still report gains and complete Quadro RW for foreign asset monitoring.
- Q: Can I deduct hardware costs for mining?
- A: Yes, mining expenses are deductible against mining income if properly documented.
- Q: When do I pay IVA (VAT) on crypto?
- A: Only if you’re a business – individuals trading aren’t subject to VAT.
Essential Tips for Compliance
- Keep detailed records of all transactions for 10 years
- Use the Agenzia’s precompiled form (730 precompilato) if eligible
- Report even if you lost money – losses can reduce future taxes
- Consider professional help for complex cases like DeFi yield farming
Remember: Italy’s crypto tax rules evolve rapidly. Verify current guidelines at Agenzia delle Entrate or consult a commercialista (tax advisor) before filing.
