New Italian Legislation on Cryptocurrency in the Senate

Bill 2572 containing Italian positive legislation on virtual currencies is before the Senate.

The aim of the legislator is to overcome the uncertainty in which the case in question finds itself, especially with regard to tax treatment, as a result of the lack of specifically defined rules.

The financial processing of cryptocurrencies today takes on features that are not always clearly defined and are not devoid of uncertainty; The author analyzed the problem in the article Cryptocurrencies: Tax Obligations and Reporting, How to Orient Yourself.

Simplify for the sake of brevity, current tax framework, It is based on interpretations of practice which jurisprudence has greatly welcomed, Basically equal to virtual currencies with foreign currencies, With all the tax implications of this fact.

The new regulatory regime, which seeks to go beyond the clearer limits of the existing framework without prejudice to it, is the result of the need to clearly define the tax treatment of the issue, pending the completion of the regulatory path of the MiCA regulation (abbreviated from Markets in crypto assets), which deals more generally with the more complex world of various crypto-assets, to which national legislation will necessarily have to link it.

Law No. 2572 in paragraph 1 defines virtual currency and in paragraph 2 places it in a financial framework.

The virtual currency is called “A form of a mathematical unitThe mathematical unit is defined Minimum encoded mathematical units, static or dynamic, capable of representing rights, with independent circulation“.

This definition incorporates the definition of virtual currency that already exists in the Italian legal system, that contained in Article 1, paragraph 2, letter F of Legislative Decree 231/2007, and aims to overcome the ambiguity caused by the fact that the same activity can be given different definitions.

From a financial point of view, the most important novelty isDefinition of Tax time, which will not be withdrawalAs with foreign exchange, which becomes a financially irrelevant situation, how much more do you wantuInstead, cryptocurrency is used as a means of payment or converted into traditional currency (Euro and foreign currencies).

Thus, the conversion of one virtual currency to another virtual currency is not subject to tax.

Basically, the imposition moment is formed by “Manifestation of wealth”, in the words of the legislator, the moment when cryptocurrency is used to pay for a good for a service or is converted into fiat currencies.

The new fiscal framework inherits from the previous absorption of foreign exchange the provision that Taxation is subject to possessionby the taxpayer, fromtoVirtual coins with a value greater than €51,645.69 for at least seven consecutive business days in the same fiscal year.

No less important is the fact that the bill also sets Obligations related to tax control and IVAFE, The explanations given so far are confirmed by practice on the subject:

  • For tax control purposes RW part assembly is mandatory In the annual tax return, but Just for consistency Higher virtual coins to 15,000 euros in the tax period;
  • .in the endThe From cryptocurrency IVAFE tax will not be deducted It does not qualify as financial products.

In view of the large fluctuations in value that can affect virtual currencies in the same tax period, it is expected The monitoring obligation must be fulfilled taking into account the cost or value of the purchase Cryptocurrency.

Finally, a cross base is conceivableTheResetting purchase values ​​as of January 1, 2022with an alternative tax attached in parentheses, which requires a specific sworn assessment.

Bonus Effect Restatement, and therefore limited only to the taxpayers who have done so, There will be exemption from penalties for omissionObligations related to tax control Occurred in previous fiscal years.

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