The preliminary budget proposal that was recently accepted by the Italian Council of Ministers included a number of particular tax provisions that specifically applied to cryptocurrencies.
It is important to wait until the conclusion of the parliamentary process and the promulgation of the final text of the law in order to have certainty regarding the precise wording of the rules. This can be done by reviewing the main issues addressed by the bill, which is still a DDL (a “disegno di legge,” which is the initial phase of a law that is proposed by one or more members of parliament.)
Because they have used a series of cross-references and modifications to existing tax rules that are updated or replaced, five articles, from Article 30 to 34, are rather intense and difficult to read, especially for amateurs.
Numerous online news outlets have previously made serious mistakes like reporting the rumor that capital gains tax would be available at a rate of 14%.
The proposed law states that capital gains from cryptocurrency transactions fall under the category of miscellaneous income and that, once fully implemented, they will be subject to a tax rate of 26% when they surpass a level that appears to be informally set at 2,000 euros.
It is also unclear how the simple act of keeping cryptocurrency assets could result in capital gains or other types of income.
More importantly, it is vital to define what is meant by “crypto-assets having the same characteristics and functions” because the regulation indicates that exchange transactions would result in taxable matter unless they occur between crypto-assets that share such characteristics and functions.
An exchange of Bitcoin for Ethereum or another two-way cryptocurrency, for instance, is without a question an exchange of crypto-assets with the same purpose (both serving as a mode of payment). These crypto-assets may or may not share the same traits, they can spark countless debates.
The proposed bill appears to aim for the broadest possible scope of application in the crypto-asset industry. NFTs and other digital assets were covered as well. It read:
“For one thing, NFTs seem to have all the characteristics to fall within the perimeter of a “crypto-asset, however named, electronically stored or traded on a distributed ledger or equivalent technologies.”
A substitution tax of two percent will be imposed on Italian residents who own crypto assets starting in 2023 in addition to the introduction of a stamp tax that will be applied to periodic interactions with customers (just as it is in the case of traded financial products).
The DDL undoubtedly has some positive aspects because the Italian government has finally taken a proactive role to establish a thorough tax policy for cryptocurrencies—
The reality remains, though, that there are still a lot of areas that require more precise definitions, and that definitional work needs to be done more thoroughly.
Italians hope that the legislative body has the required sensibility and aptitude to pay attention to individuals who contribute particular knowledge to the crypto sector, rather than just to the usual excuses for a cash register that is still empty.
These questions lie somewhere between the original framework and the points of arrival that will arise from the parliamentary procedure that promises to be urgent. However, many lay down the prophecy that there may not be much room for discussion on the particular concerns surrounding crypto.