Crypto Tax Guide For Italy (2025)

📌 Introduction

The Agenzia delle Entrate (Italian Revenue Agency) is the primary authority responsible for tax enforcement and compliance in Italy. Under the 2023 Budget Law, Italy introduced a formal definition of “crypto-assets” and clarified their tax treatment, aligning with the EU’s MiCA (Markets in Crypto-Assets) regulation.

Crypto-assets are now treated as financial instruments. Gains from disposal of crypto-assets are subject to capital gains tax, while income received through a business, a mining operation, staking rewards, or NFTs are taxed as income.

This guide covers the tax implications of buying, selling, and earning crypto in Italy, as well as how to report, and strategies for reducing your crypto tax bill.

📅 Reporting and Deadlines

Tax Year: January 1 to December 31.
Filing Deadline: October 31 for most crypto investors.
Forms: Crypto holders must report their assets using the “Quadro RW” section of the Modello Redditi PF (Personal Income Tax Return). This form is also used to calculate the Imposta sul Valore delle Cripto-attività (IVAFE), a 0.2% wealth tax on crypto held abroad.

💼 Crypto Tax Basics

Taxable Transactions

Selling or Swapping Crypto: Capital gains from selling or exchanging crypto are taxable. As of the 2023 Budget Law, gains exceeding €2,000 in a tax year are subject to a flat 26% capital gains tax. Losses can be used to offset gains.
Using Crypto for Purchases: Using crypto to pay for goods or services is considered a disposal and may trigger capital gains tax, just like swapping or selling.
Receiving Crypto: Crypto received as income (e.g., from mining, staking, or airdrops) is taxed as miscellaneous income at the recipient's marginal income tax rate.

Non-Taxable Transactions

Purchasing Crypto with Fiat: Buying crypto with fiat currency is not a taxable event. You don’t pay taxes until you realize a gain by selling/disposing.
Transferring Between Wallets: Transferring crypto between wallets owned by the same individual is not taxable.
Gifts of Crypto: Gifting crypto may be subject to gift tax, depending on the relationship between the donor and recipient and the amount gifted.

Deducting Losses

Offsetting Gains: Capital losses from crypto transactions can offset capital gains in the same tax year.
Carryforward Rules: Unused losses can be carried forward to offset future capital gains for up to four years.

Key Allowances and Thresholds

Capital Gains Exemption: Capital gains from crypto are tax-exempt if total gains do not exceed €2,000 in a tax year.
Income Tax Exemption: Income from crypto activities is subject to the general income tax exemption thresholds, which vary based on the type of income and the taxpayer's circumstances.
The Substitute Tax (Imposta Sostitutiva): Italian taxpayers can opt to pay a tax of 18% of their total crypto assets instead of paying capital gains taxes.

💸 Income Tax Brackets

Italy employs a progressive income tax system (IRPEF) with the following brackets:

Income Range	Tax Rate
Up to €15,000	23%
€15,001 – €28,000	25%
€28,001 – €50,000	35%
Over €50,000	43%

Italian taxpayers also need to pay additional regional and municipal taxes, typically ranging from 0.7% to 3.33% for regional taxes and 0.1% to 0.9% for municipal taxes.

📈 Capital Gains Tax on Crypto

Taxable Events

Selling/swapping Crypto for Profit: Profits from selling crypto are subject to capital gains tax. Anytime you sell crypto, a taxable event occurs.
Using Crypto for Purchases: Using crypto to buy goods or services may result in taxable capital gains.

Calculation Method

Determining Net Profits: Subtract the acquisition cost from the sale price to determine the gain.
Holding Period: Italy does not differentiate between short-term and long-term capital gains for crypto; all gains are taxed at the same rate.
Tax Rate: As of the 2023 Budget Law, capital gains from crypto are taxed at a flat rate of 26%.

The Substitute Tax Explained (Imposta Sostitutiva)

Imposta Sostitutiva is a unique caveat to Italian taxes. It has a few potential applications across different asset classes.

Regarding crypto assets, the Imposta Sostitutiva rule allows traders to elect to pay 18% of the total value of their crypto assets, based on their fair market value in Euros on January 1st.

This may make sense for traders who trade frequently and who have accrued an unusually large number of short-term capital gains.

Italian users of Awaken can find their total portfolio balance on January 1st by downloading a balance report.

💰 Income Tax on Cryptocurrency

Taxable Income Sources

Mining, Staking, and Lending Rewards: Rewards from mining, staking, and lending are all taxed as income and taxed at your marginal tax rate.
Airdrops: Crypto received from airdrops is taxable as income at the time of receipt.
Payments for Goods or Services: Receiving crypto as payment is treated as income and taxed at the recipient's marginal rate.

Calculation Method

Valuation: Crypto income is valued at the fair market value in euros at the time of receipt.
Expenses: Related expenses may be deductible, depending on the nature of the income.
Tax Rates: Income is taxed according to the progressive income tax brackets mentioned above.

🔍 Tax Treatment of Specific Crypto Transactions

Mining and Staking

Income Recognition: Rewards from mining and staking are recognized as income when received, included in your total yearly income, and taxed accordingly.
Disposal: Any capital gains from the sale of mined or staked crypto are subject to capital gains tax. Cost basis is calculated based on the fair market value of the rewards when they were received.

Airdrops and Hard Forks

Airdrops: Crypto received from airdrops is taxable as income at the time of receipt.
Hard Forks: New coins received from hard forks are considered taxable income when they become available to the taxpayer.

NFTs

Sales: Profits from "flipping" NFTs (buying and then later selling) are subject to capital gains tax and are taxed the same way as regular crypto tokens.
Creation and Sales by Artists: Income from creating and selling NFTs is taxed as business income.

DeFi Activities

Earnings: Income from DeFi activities, such as yield farming or liquidity provision, is taxable as income when received.
Token Sales: Profits from selling tokens obtained through DeFi activities are subject to capital gains tax.

Lost or Stolen Crypto

Currently, Italian tax law does not provide specific provisions for the tax treatment of lost or stolen crypto. Taxpayers may need to provide evidence of loss and consult with tax professionals for guidance.

Gifting and Inheritance

Gifts: Typically, receiving crypto as a gift in Italy is not a taxable event. If you later sell the gift, you are then subject to tax on the capital gain, based on the fair market value at time of receipt.
Inheritance: Crypto inherited is subject to inheritance tax, with rates varying based on the relationship between the deceased and the heir.

🧾 Using Crypto Tax Software

Utilizing crypto tax software can simplify the process of tracking transactions, calculating gains and losses, and generating necessary tax reports. Key features to look for include:

Transaction Tracking: Automatic import of transactions from various wallets and exchanges.
Classification: Categorization of different types of transactions (e.g., trades, income, gifts).
Reporting: Generation of tax reports compatible with Italian tax forms, including Quadro RW.
Support: Access to customer support and resources for navigating complex tax situations.

💡 Reducing Crypto Taxes Legally

Tax Loss Harvesting: Selling crypto at a loss to offset capital gains can reduce taxable income.
Reduce Activity: While Italy does not differentiate between short-term and long-term gains, less activity means fewer taxable events and the potential to avoid unwanted taxes.
Utilizing Exemptions: Keeping annual gains below the €2,000 exemption threshold can avoid capital gains tax.
Professional Advice: Consulting with tax professionals can help identify additional strategies tailored to individual circumstances.

✅ Conclusion

Compliance with Italy's crypto tax regulations is essential to avoid penalties and ensure accurate reporting. Maintaining detailed records of all crypto transactions and consulting with tax professionals can aid in navigating the complex tax landscape.

For official guidance and updates, refer to the Agenzia delle Entrate website.