Legislative Background
Enacted Rules and Subsequent Changes
From 1 January 2023, Italy introduced a specific tax regime for crypto-assets held by individuals outside a business. The rules were enacted by Law 29 December 2022, no. 197 – the 2023 Finance Law, principally Article 1, paragraphs 126–147.
The rules discussed here concern private investors; crypto activities carried on as a business require a separate analysis.
Article 1(126) inserted a new category of miscellaneous income, redditi diversi, into Article 67(1)(c-sexies) of the Italian Income Tax Code (TUIR). It covers gains and other income arising from the redemption, disposal for consideration, exchange or holding of crypto-assets. It also introduced the calculation rules in Article 68(9-bis). These provisions replaced the previous approach of treating cryptocurrency transactions by analogy with foreign-currency transactions.
The Italian Tax Agency subsequently explained its interpretation in Circular 30/E of 27 October 2023.
Tax rates and the former €2,000 threshold
The original regime applied a 26% substitute tax, with a €2,000 annual threshold governing the relevant gains and income.
Law 30 December 2024, no. 207 – the 2025 Budget Law.
- Article 1(24) increased the general substitute-tax rate to 33% for gains and other relevant income realised from 1 January 2026.
- Article 1(25) removed the €2,000 threshold from Article 67(1)(c-sexies), and the corresponding threshold in the loss provisions of Article 68(9-bis), from 1 January 2025.
Accordingly, the general rate remained 26% for 2025, with no Euro 2,000 threshold, and increased to 33% from 2026. The applicable rules must therefore be checked separately for each tax year.
A further amendment was introduced by Law 30 December 2025, no. 199 – the 2026 Finance Law, Article 1(28). This retains a 26% rate for income from qualifying Euro-denominated electronic-money tokens, subject to the statutory conditions. Mere conversion between Euro and those qualifying tokens, and redemption of their nominal value in Euros, do not realise gains or losses. This exception should not be extended automatically to other stablecoins.
Crypto-assets and Italian tax
The Italian Tax Agency’s Circular 30/E of 27 October 2023 explains the crypto-asset rules introduced by the 2023 Finance Law. This article focuses on individuals holding crypto-assets as private investments, outside a business.
Italian tax residents generally fall within the Italian tax rules regardless of whether they use an Italian exchange, an overseas platform or their own wallet. The circular is the Agency’s interpretation of the legislation, rather than legislation itself.
The International Background
The EU’s Directive on Administrative Cooperation—usually abbreviated to DAC—provides for cooperation and information exchange between tax authorities. DAC8 extends that framework to crypto-assets, alongside the OECD’s Crypto-Asset Reporting Framework. Under DAC8, reporting providers collect information about relevant transactions from 1 January 2026, with the first exchanges between tax authorities due by September 2027. These are transparency measures: they do not themselves determine whether an individual transaction is taxable under Italian law. European Commission: DAC8.Disposals and Swaps
Disposals
Selling cryptocurrency for Euro or another conventional currency can realise a taxable gain. Using crypto to purchase goods or services can also trigger taxation.
Swaps (Exchanges)
Certain swaps or exchanges between crypto-assets with the same characteristics and functions are tax-neutral. In a qualifying swap, the asset received takes over the tax cost of the asset given up. The deferred gain therefore remains embedded in the replacement asset.
This is not a blanket exemption for everything labelled a “swap” or “exchange” Stablecoins and swaps involving different types of token require particular attention. Nor should an investor assume that taxation only arises when money reaches a bank account: a conversion into fiat on an exchange needs to be considered separately from a later withdrawal. Circular 30/E, section 3.1.
Calculating gains and documenting costs
Calculation of Gains and Losses
A taxable gain is broadly the disposal proceed – or the relevant exchange value – less the recognised acquisition cost. The taxpayer must substantiate that cost with precise and reliable evidence; otherwise, the legislation provides for a nil cost.
Under Article 68(9-bis), gains are broadly the difference between the consideration received—or the relevant market value in a taxable exchange—and the recognised acquisition cost.
For inherited assets, the cost is the value established for inheritance-tax purposes or, in its absence, the declared value. For gifted assets, the recipient takes over the donor’s acquisition cost.
Complete exchange statements and transaction records are therefore important, including earlier purchases and exchanges affecting the cost of assets later disposed of. TUIR, Article 68(9-bis).
Dealing costs
The Italian Tax Agency’s stated position is that incidental acquisition and disposal expenses, such as commissions, are not deductible under these provisions. Circular 30/E, section 3.1.
The Importance of Records
Preparing, if necessary and keeping a complete transaction history is therefore essential. Records should cover purchases, sales, exchanges and transfers between wallets, including transactions from earlier years needed to establish the cost of assets subsequently sold.
See below for details of Valuation Methodology and Converting Crypto Values into Euros
Losses and the Importance of Timing
Qualifying crypto losses can offset relevant crypto gains in the same tax period. An eligible excess loss can be carried forward for up to four subsequent tax periods, provided it is reported in the return for the year in which it arose. The former threshold conditions remain relevant when reviewing losses arising before 2025. These provisions do not create a general right to offset crypto losses against gains on shares or other investments. Nor is there a carry-back permitting a later loss to reduce an earlier year’s taxable gain. The classification as redditi diversi requires gains and losses to be reported in Section RT of the Modello Redditi PF, or the corresponding Section T of Form 730, where that form is available and appropriate. Different arrangements apply where a qualified Italian intermediary operates an applicable tax-withholding and reporting regime. Italian Tax Agency: crypto gains, losses and reporting.Tax Rates: Subsequent changes
The circular describes the rules introduced in 2023. Later legislation changed the rates and thresholds:
| Tax year | General position for relevant crypto gains and income |
|---|---|
| 2023–2024 | 26%, with the then-applicable €2,000 threshold rules |
| 2025 | 26%; the €2,000 threshold was removed |
| From 2026 | General rate of 33%, subject to specific exceptions |
These changes make it important to calculate each year separately.
From 2026, qualifying euro-denominated electronic-money tokens retain a 26% rate. The legislation also provides that mere conversion between euros and those qualifying tokens, or redemption of their nominal value in euros, does not realise a gain or loss. The exception has specific conditions and does not extend automatically to all stablecoins. 2026 Budget Law, article 1(28).
Wealth Tax and Foreign Asset Reporting Obligations
Crypto holdings generally require disclosure for tax-monitoring purposes, subject to applicable exemptions, including those for certain intermediary arrangements for qualifying Italian intermediaries. Self-custody does not itself remove that obligation.
Reporting crypto-assets correctly can involve a considerable amount of work, particularly where a portfolio contains numerous coins and a substantial number of purchases, sales and swaps during the year. A statement showing the total portfolio value at 31 December may be a useful starting point, but will not necessarily provide all the information needed to complete the return.
Tax on the value of crypto-assets is technically distinct from IVAFE. It is referred to as the tax on the value of crypto-assets (IVACA) and its scope is not confined to assets held abroad—it can also apply to self-custodied holdings in Italy. IVACA is generally charged at 0.2%, proportionate to the number of days the assets were held during the year and the taxpayer’s ownership share. The relevant value is normally the value at year end or, for assets disposed of earlier, the value at the end of the holding period. Consequently, assets sold or exchanged during the year cannot simply be left out because they no longer appear in the closing portfolio.
This does not mean obtaining a fresh market valuation for every day of the year. It does, however, mean keeping sufficient records to establish the quantities held, the relevant acquisition and disposal dates, and the values in Euro at the applicable valuation dates. A swap which is tax neutral for capital gains purposes does not, by itself, remove these reporting and wealth tax requirements.
For an actively traded portfolio, reconstructing this information across several exchanges and wallets can be burdensome. The practical difficulty is reconciling the transaction history with the holdings and holding periods reported in the return. Investors should therefore retain complete transaction records throughout the year, rather than relying solely on a year-end balance or a summary of realised gains.
The complexity of the RW reporting should not be underestimated especially for a busy portfolio of crypto holdings involving a number of sales, disposals and swaps in the year.
A separate annual charge generally applies at 0.2%, through stamp duty or the wealth tax on the value of crypto-assets, as appropriate. These obligations can arise without any disposal or taxable gain. The former €2,000 income threshold was not a general exemption from reporting holdings. Circular 30/E, sections 3.4 and 3.7.
Income from Holding or Using Crypto-assets
Crypto taxation is not confined to gains on disposal. Staking and other arrangements can generate returns paid in additional tokens. Such receipts may be taxable when received, even without a sale or withdrawal into a bank account. The treatment depends on the underlying arrangement: descriptions such as “interest”, “rewards” or “cashback” are not conclusive. Records should identify the nature of each receipt, its date, the quantity received and its Euro value.
Valuation Methodology: Identifying the Cost of Assets Sold
Where the same coin or token has been acquired on several occasions at different prices, calculating a disposal gain requires a method for identifying the acquisition cost attributable to the units sold.
Common methods include LIFO (last in, first out), which treats the most recently acquired units as sold first; FIFO (first in, first out), which uses the oldest acquisitions first; and weighted-average cost, which averages the cost of the relevant holdings. These methods can produce materially different gains for a particular year.
For taxpayers reporting crypto gains in their own returns the position requires care. The circular describes LIFO (last in first out, when discussing the rules applicable before 2023. However, Article 67(1-bis), which expressly prescribes the most-recently-acquired-first approach for specified financial assets, does not expressly include the new crypto category in Article 67(1)(c-sexies). Consequently, the circular cannot be considered to be an unequivocal endorsement of LIFO for all post-2022 self-assessed crypto gains. Equally, this omission does not establish an unrestricted choice between LIFO, FIFO and average cost. TUIR, Article 67, Circular 30/E, section 2.3.1.
A foreign intermediary may provide a gain calculation using weighted-average cost, a pooling method or the rules applicable in its own jurisdiction. That calculation should not automatically be adopted for an Italian tax return. It is necessary to establish which method was used, whether the report includes the complete acquisition history, and whether its treatment is appropriate under the applicable Italian tax regime.
For crypto-assets held under Italy’s risparmio amministrato regime, Circular 30/E expressly provides for weighted-average acquisition cost for assets of the same denomination. It also explains how that cost carries over on a qualifying tax-neutral exchange. Merely holding assets with an intermediary—or allowing it to manage investments—does not establish that the account operates under this Italian tax regime. Circular 30/E, section 3.2.2.
The methodology adopted should therefore have a documented basis and be applied consistently, preserving the acquisition history and the remaining cost of unsold assets. Ease of calculation, or a more favourable result in a particular year, is not sufficient justification for adopting or changing a method. Particular care is needed with transferred holdings, tax-neutral exchanges and changes of intermediary, where an incomplete cost history can distort both current gains and future calculations.
Converting Crypto Values into Euros
Italian tax calculations and reporting must be expressed in Euro. Acquisition costs and disposal proceeds should be valued separately at their respective dates: calculating a gain in US dollars and converting only the resulting profit can produce an incorrect Euro gain. For amounts paid or received in a foreign currency, Article 9(2) TUIR generally requires the exchange rate on the relevant date, or the nearest preceding date; where unavailable, the prescribed fallback is the rate for the relevant month. TUIR, Article 9. Where a taxable transaction requires a crypto market valuation, Circular 30/E refers to the value available from the platform on which the exchange took place at the transaction date, with the statutory normal-value rules applying where that quotation is unavailable. A tax-neutral swap instead preserves the carried acquisition cost. Year-end holdings valuations serve a separate reporting purpose and do not replace historical costs when calculating disposal gains. Circular 30/E. Records should therefore contain the quantities, relevant dates, prices, exchange rates and sources used, allowing the relevant Euro amount to be reconstructed.How We Can Help
We can help reconstruct your transaction history, assess the treatment of particular exchanges and establish the reporting and payment obligations arising from your Italian tax residence.