Legal rules for the metaverse and taxes on NFTs

A financial study of the latest exciting technology challenge: from the definition of the metaverse and the NFT, a non-fungible code, to the question of fusion between the real and virtual world.

Neil Stephenson In a cyberpunk novel snow crash (1992), coined the term metaversewhich was one 3D space Through which natural persons can move and interact through it custom avatars.

The metaverse Today represents an idea parallel universealready in our present, where blockchain, smart contracts, NFTs, cryptocurrencies, and artificial intelligence allow A fusion between the real and the virtual world.

Thus in the context of the video game, the player will be able to access a file A virtual store for a real brandTry an article with your avatar, buy it and then deliver it to the real world.

In this context, it will be necessary New organizational solutions In terms of privacy and intellectual and industrial property rights, Ed Also from the tax authorities.

Metaverse: Legal Challenges

A new law for a new world, in which the first question to be answered is what are the sources of law, where, according to proponents code-based approachthe law (states) will not be there The primary source of digital lawbut the symbol, this is Software and hardware group that regulates the functioning of the system.

As early as 1996, the judge Frank H. Easterbrook From the Seventh United States Court of Appeals, moreover, to define digital law K Separate part of law studies.

A year later, in an article entitled Lex InformaticaAnd Joel RidenbergThe expert in information technology law, then explained how in cyberspace Government Law and Regulations They are not the only source for producing rules, dictating technological capabilities and system design choices specific rules for participants.

Bring business and social activities into a reality like metaverseOr it would pit the physical world – where our legal systems exist and prevail – against A virtual worldwhere the symbol prevails.

In short, it will be necessary to a two systemsTo live together, yeah “speak”.

Legal systems, for example, can regulate Companies active in the metaverseto ensure that consumer protection rules are transmitted directly to the code.

Ultimately, the law will have to rise to the challenge of ensuring that the law is complied with Rules applicable in the physical world In the traditional cyberspace.

The alternative, which is certainly undesirable, is for the symbol to rise to The prevailing legal systemwith private actors able to deprive users of the protections that our legal systems have developed over the centuries and which, however, will not always be appropriate for the conditions that might occur in virtual reality.

That’s why it seems more and more There is an urgent need to develop new specific legislation.

And also in order to preserve one of the oldest powers of the state: the fiscal authority.

In fact, it’s hard to wield this power in a world without it real limits.

Legal rules for the metaverse and taxes on NFTs

In this context, for example, it is increasingly urgent to clarify what a file Method for taxing NFTs?

The Non-replaceable code (NFT) are .-based cryptographic tokens blockchain technologywhich contains the right to digital assets.

In practice, the owner of NFT . buys Digital Certificate of Authenticity “derivation” in the code itself.

For some time, there have been questions about tax collection from Cryptocurrency.

But here we are in a completely different context.

The basic characteristic of currencies is actually the property of existence replaceableie interchangeable.

banknote from 50 euro It is identical to another 50 euro paper note. The same is true of cryptocurrencies, even if they are in the digital sphere.

a NFTon the other hand, by definition is Non-Fungible Codeis not adjustable and not repeatable.

This is unique object.

For this reason, NFT from a financial point of view is more like advertising A work of art or a collector’s item.

So when we talk about cryptocurrencies and forex we are moving in the field of financial investments.

On the contrary, when we talk about NFT, it is first important to understand whether NFT . trading that it Habitual or occasional activity.

On the basis of the current rules of our legal system, in fact, if one / a few operations are performed with NFTwithout habitual diffusion and without speculative intent, no capital gains tax would be levied, as happens in Private art collector position.

Then the occasional seller is the one who occasionally buys the artwork/NFT and resells it for a profit.

That of the combination So it is not his main businessThus these incomes are not prevalent in the aggregate.

In this case, we do not face professional workTherefore, no business income is produced.

Any profits, however, fall into the category “different income”that is, the income generated by Business activities that are not normally practiced; And (again in the current system) marginal taxes are applied to the RL portion of the tax return.

The Broker technician – Rajesser Finally, a person who usually buys artwork with the specific goal of reselling it for a profit.

In this case there is permission Habit, spread and purpose of profit.

Since it is a professional activity, with the current legislation, it produces business income, thus Subject to value added tax of the same operations.

Finally, in organizational silence And the practice of financial management, there is still doubt about the correct treatment with reference to tax control obligations.

In fact, due to the intrinsic characteristics of these assets, there are no actual standards “geographic location” Outside of the NFT, it would be difficult to compose the presence of such a commitment on the part of the owner.

With reference to tax control obligations, theArticle 4 of the decree-law n. 167 for the year 1990 Moreover, it states that natural persons, non-commercial entities, simple companies and the like residing in Italy, which, during the tax period, have investments abroad, or foreign financial activities, capable of generating taxable income in Italy, must refer to them In the annual tax return.

But can NFTs fall into this definition?

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