How to Report Crypto Income in Italy: Complete 2024 Tax Guide

Understanding Crypto Taxation in Italy

Reporting cryptocurrency income in Italy is mandatory under the country’s tax laws. The Italian Revenue Agency (Agenzia delle Entrate) treats cryptocurrencies as “foreign currencies” or digital assets, meaning profits from trading, mining, staking, or selling crypto are subject to taxation. Failure to properly declare crypto income can result in audits, penalties of 90-180% of unpaid taxes, and criminal charges in severe cases. This guide breaks down the process step by step.

Step-by-Step Guide to Reporting Crypto Income

1. Determine Taxable Events

You must report:

• Crypto-to-fiat conversions (e.g., BTC to EUR)
• Crypto-to-crypto trades (e.g., ETH to SOL)
• Staking or mining rewards
• NFT sales profits
• DeFi yield earnings
• Airdrops exceeding €51.65 value

2. Calculate Capital Gains

For each transaction:

• Gain = Selling Price – Purchase Price – Transaction Fees
• Use FIFO (First-In-First-Out) method for cost basis calculation
• Maintain records of all transactions (dates, amounts, wallet addresses)

3. Complete Tax Forms

• Form RW: Declare foreign-held crypto assets exceeding €15,000 at year-end
• Form Redditi PF: Report capital gains in Section RT (Box 8) and other income in Section RM
• Use certified software (e.g., commercial tax programs) for electronic submission

4. Pay Taxes

• Capital gains tax rate: 26%
• Deadline: June 30th for Form RW, November 30th for tax payment
• Payment methods: F24 form via bank/post office or online portals

Special Cases & Exemptions

• Holding Period: No tax if crypto held >12 months (only applies to assets purchased before 2023)
• Small Transactions: Exemption for trades under €2,000 per exchange annually
• Professional Traders: Subject to IRPEF progressive rates (23%-43%) instead of capital gains tax

Record-Keeping Requirements

Maintain for 5+ years:

• Transaction histories from exchanges
• Wallet addresses and private keys documentation
• Receipts for hardware wallets
• Proof of mining/staking activities
• Calculations for cost basis and gains

Frequently Asked Questions (FAQ)

Q: Do I pay tax on crypto I haven’t sold?

A: No tax applies until you dispose of crypto through sale, trade, or spending. Holding assets isn’t taxable.

Q: How are crypto losses handled?

A: Capital losses can offset gains in the same tax year. Unused losses carry forward for up to 4 years.

Q: Is Binance/Kraken data shared with Italian authorities?

A: Yes. Under EU DAC8 regulations, all exchanges must report user transactions to Italian tax authorities starting 2026.

Q: What if I used a foreign exchange?

A: You must still declare income and file Form RW if holdings exceed €15,000. Penalties for non-disclosure start at €258+.

Q: Are there penalties for late filing?

A: Yes. Minimum €250 penalty for late Form RW, plus 0.2% monthly interest on unpaid taxes.

Professional Guidance Recommended

Given Italy’s complex crypto tax rules, consult a commercialista (certified accountant) specializing in cryptocurrency. They can help with:

• Optimizing tax liabilities
• Navigating international holdings
• Preparing audit defense documentation
• Applying for voluntary disclosure programs if past filings were incomplete

Always verify calculations using the Agenzia delle Entrate’s official guidelines or certified tax software before submission.