Crypto Tax Legislation & Law in Italy

With the 2023 Budget Law (entered into force from 1 January 2023) Italy has issued specific rules with respect to the income tax treatment of crypto-assets. In October 2023 Italian Tax Authorities (ITA) have published more detailed guidelines (Circular Letter 27.10.2023, no. 30/E).

According to the 2023 Budget Law provisions and ITA guidelines, crypto-assets (which include crypto-currencies without any distinction in the applicable tax regime) are defined as “digital representation of value or rights that can be transferred and stored electronically, using distributed ledger or similar technology”.

Unless they fall in the category of capital income, professional income or employment income, capital gains and other income realised through the redemption or disposal for consideration, exchange or holding of crypto-assets qualify as miscellaneous income for the purposes of income tax.

The 2025 Budget Law (entered into force from 1 January 2025) has increased the income tax rate applicable to crypto-assets. 

As a general rule, the taxable base for capital gains arising from the exchange of crypto-assets for a conventional FIAT currency made by Italian tax-resident individuals not carrying out a professional activity is the difference between the sale price (in case of sale for consideration) or the normal value (in case of sale for exchange) and the purchase price (for individuals carrying out a  professional activity, see Q4 below). The purchase price needs to be documented with reliable evidence by the taxpayer, otherwise it is considered to be zero.

Capital gains are subject to a substitute tax (26% until 31 December 2025, 33% from 1 January 2026) at the time of receipt in the hands of the individual (cash basis principle).

Until 31 December 2024, capital gains were taxable only if they exceeded EUR 2,000 in the relevant fiscal year. Effective as of January 2025, the EUR 2,000 “no-tax zone” has been abolished.

No deduction of costs is allowed.

• exchange of crypto-assets for goods/services is a taxable event and the same rules described for conventional FIAT currency apply
• exchange of crypto-assets for other crypto-assets of a different nature (e.g. crypto-currency in exchange for NFTs) is a taxable event and the same rules described for conventional FIAT currency apply
• exchange of crypto-assets for other crypto-assets of the same characteristics and functions is explicitly excluded from income tax.

Income arising from transactions with crypto-assets made by Italian tax-resident individuals carrying out a professional activity qualify as professional (business) income for the purposes of income tax and should be included in the taxable base subject to personal income tax (IRPEF) at progressive rates up to 43% (plus local surcharges up to 4%) on an accrual basis principle.

Italian tax provisions do not expressly define a professional activity; however, they refer to the general principles laid down by the Italian Civil Code, according to which an activity is deemed to be of a professional nature should it fall into certain specific categories provided therein and, in any case, when the activity is carried out by means of an organisation in the form of an enterprise. A case-by-case analysis is required to identify indicators of “entrepreneurship” and “continuous activity” such as: number of transactions, magnitude of turnover, lack of other sources of income, short periods between purchases and resales, and pushing sales through advertising.

1. Any capital losses can offset capital gains. Until 31 December 2024, capital losses could be used to offset capital gains only if they were in excess of EUR 2,000.
2. Same rules described under 1. apply;
3. Not possible.

Any capital losses (higher than EUR 2,000 until 31 December 2024) can offset capital gains realised in the same fiscal year, and the excess amount (if any) can be carried forward for the following 4 fiscal years (provided that the excess amount is disclosed in the tax return of the fiscal year in which the capital losses are realised).

Yes. The definition of crypto-assets under Q1 includes any type of digital asset including NFTs (except as specified below).

ITA guidelines have specified that income derived from the transfer of NFTs representing the author’s intellectual works qualifies as:

• professional income, if the activity is deemed to be of a professional nature (see Q4);
• miscellaneous income, if the activity is not deemed to be of a professional nature (see Q4).

Neither the Italian tax provisions nor the ITA have issued specific guidance on taxation of mining for individuals. The tax treatment of the income depends on whether a professional activity is currently carried out or not and on the actual agreement in place between the parties (i.e. consideration is contingent upon successful mining or not). Generally speaking:

• if mining activity is carried out by an individual not carrying out a professional activity, the related income should fall within the category of miscellaneous income, therefore taxable at 26% until 31 December 2025, at 33% from 1 January 2026
• if mining activity is carried out by an individual carrying out a professional activity, the relevant income falls within the category of professional (business) income and the same rules under Q4 should apply.

Based on the 2023 Budget Law income related to remuneration received by individuals for staking activity by means of crypto-currencies, outside of their professional activity, fell in the category of miscellaneous income, and the same rules described above for mining rewards should apply, including the “proof-of-stake” remuneration.

In particular, ITA guidelines have clarified that any fees retained by the crypto-asset service providers from remuneration received by individuals not carrying out a professional activity for staking activity cannot be deducted from the gross taxable base.

Should crypto-assets be used as remuneration for employment/self-employment activities, they would be treated as employment/self-employment income (the taxable amount to be determined applying normal value rules). No specific rule has been issued with regard to other events/models. In general terms, the transfer of crypto-assets to third parties, unless by inheritance or gift, is considered to be a transfer for consideration and therefore relevant for tax purposes (the same rules as described under Q2 and Q4 apply).

Resident individuals must disclose their financial assets, including crypto-assets, in a specific section of their annual income tax return (Quadro RW), regardless of whether they are held abroad or in Italy and how they are archived and stored. Furthermore, a stamp duty, at the rate of 0.2% per annum to be paid in the manner and terms of personal income tax, is due on the value of crypto-assets at year end (credit for any stamp duty incurred abroad might be granted); the stamp duty is directly applied by the Italian tax resident crypto-asset service provider (if any).

As a general rule, the burden of proof regarding the taxable base (i.e. the difference between the sale price, or the normal value, and the purchase price) lies with the taxpayer; failing the proof, the cost relevant for tax purposes is equal to zero. Furthermore, the 2023 Budget Law expressly provides the possibility for an individual not carrying out a professional activity to opt for special regimes that shift to crypto-asset service providers most of the reporting obligations (i.e. the administered savings regime – regime del risparmio amministrato – and the asset management regime – regime del risparmio gestito) in relation to the relevant income.

The 2025 Budget Law allows the step-up of the purchase value, for tax purposes, of crypto-assets as of January 1^th, 2025 by the payment of a 18% substitutive tax, either as a lump sum by 30 November 2025 or in three equal annual instalments in 2025, 2026 and 2027 (plus 3% annual interest).

In terms of territoriality principles, ITA guidelines stated that income from crypto-assets is deemed to be produced in Italy (and therefore taxed therein) in case the crypto-assets are (i) held through an Italian tax resident crypto-asset service provider or (ii) through the Italian permanent establishment of a foreign crypto-asset service provider or (iii) the subject of a stable relationship with an Italian financial intermediary (or a permanent establishment of a foreign financial intermediary). Otherwise, whether crypto-assets are held through a foreign crypto-asset service provider / financial intermediary the income is deemed to be of foreign source.

Lasty, whether crypto-assets are directly held and stored by the tax payer by means of electronic or physical support (e.g., cold wallet, paper wallet, etc.) without an Italian crypto-asset service provider / financial intermediary, income is deemed to be produced in Italy to the extent that the electronic or physical support is located in Italy (for Italian tax resident individuals such support is assumed to be in Italy and if it is not the case the burden of proof is on the taxpayer).