Cookies are used on this Website. This is necessary in order to remember your preferences, as well as to
collect analytical data about visits to the Website.
Use of our Website means that you agree to the use of all cookies and analytics of Website visits in
Italian Citizens are Required to Include Cryptocurrency Transactions in Their Tax Declarations
28 August 2019 11:51, UTC
By Vsevolod Gnetii
Italian individuals now have to reflect cryptocurrency transactions in their tax returns. This is prescribed by a new by-law of April 10, 2019. The peak of filing declarations usually falls on August – September, and although tax returns are filed for the previous year, all financial statements for the current year should be closed by the end of the calendar year.
The Italian Revenue Agency has already issued and distributed a memo leaflet for taxpayers, noting that all transactions with cryptocurrencies should be included in the RW1 section of the tax return, column 3, paragraph 14 “Other financial transactions abroad with virtual currencies.” The instruction also states that it is not necessary to name a specific “foreign state,” but it is necessary to indicate the amount in virtual currency and its value in euros on the date of December 31. To calculate the value of the cryptocurrency in euros, the exchange rate of the site where the taxpayer made investments is used.
The Italian Revenue Agency clarifies that cryptocurrency investments and transactions are equated with financial activities abroad. The tax department has also introduced two new categories of financial operators: a wallet for storage (custodial wallet) and for an exchange (exchanger).
Both of these categories are classified as “the provision of services related to the use of virtual currency”, which includes all “individuals or legal entities that provide third parties with services for the exchange, storage of virtual currency, or its exchange for currencies with legal circulation."
However, there is a curious feature in this interpretation: cryptocurrency transactions have to be included in the tax declaration by Italian tax residents who make transactions abroad, or perform cryptocurrency transactions through non-resident intermediaries. At the same time, the obligation to reflect cryptocurrency transactions in a tax return does not apply to individuals or legal entities that conduct financial transactions with cryptocurrencies through intermediaries residing in Italy.
Read the best crypto news analysis here! bitnewstoday.com Bitcoin,
investments, regulation and other cryptocurrencies
Found a mistake? Select the text and press CTRL+ENTER