Crypto Taxation in Italy: A Complete Guide

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Italy is slowly following suit when it comes to cryptocurrency and experts are convinced that over 3.6 million of the Italian population will be holding on to their digital assets by 2025. As crypto gains popularity, it is increasingly becoming necessary to understand how crypto is taxed to the business and the investor.

The collection of taxes on cryptocurrencies falls on the Italian Revenue Agency (Agenzia delle Entrate), which will have to act according to national and EU laws on finance. The recent Budget Laws 2023 and 2025 have re-regulated the crypto tax regime in Italy, which is why it is necessary to know about the development.

Tax Authorities & Regulations

Agenzia delle Entrate is the main institution that governs the taxation of crypto in Italy. Cryptocurrency is presently on a par with foreign currency as far as taxation is concerned. This classification has an effect on the reporting and taxation of the transactions.

Significant changes were made through the Budget Laws of 2023 and 2025, which included such innovations as a tax option depending on the portfolio value and an increase in the rate of capital gains tax. The tax code of Italy also mandates that owners of crypto assets report gains and foreign investments once a year, and failure to do so attracts serious penalties.

Types of Crypto Taxes in Italy

Capital Gains Tax (CGT): This is charged when crypto is sold or exchanged and the gains are charged on the value of the holding and transaction history.
Income Tax: Applied to crypto that is earned during mining, staking, airdrops, or bounties or as salary; 23% to 43%.
Wealth Tax: A 0.2% tax on crypto in possession of foreign intermediaries or self-custodied wallets.
Stamp Duty: Automatically withheld in case crypto is in custody of Italian custodians.
New resident tax: Flat Tax of 100,000 euros a year on foreign income, which may include crypto income.
Inheritance and Gift Tax: It might be applicable based on the type and amount of transferred cryptocurrency assets.

Tax Rates and Brackets

The current capital gains tax is 26% with an increment to 33% effective January 1, 2026.
There are some reports that an increase to 42 % is to be made, but it has not yet been approved.
Alternative proposal: 18% fixed tax on the value of the crypto portfolio as of January 1, which can be paid in not more than 3 installments.
Staking, mining or payment income can be taxed at 23-43%.
0.2% of the wealth tax on cryptos held outside Italian institutions.
The carry forwards of losses are possible within 5 years.

Crypto Transactions & Tax Treatment

Purchasing crypto using fiat: It is not taxable.
Crypto to fiat: Taxed as capital gains.
Crypto to crypto swaps: Taxable events.
Moving between wallets: Not taxable.
Mining & staking rewards: Taxed upon receipt and then upon disposal.
Wages or crypto-payment: Treatment as personal income.
Airdrops, bounties: Probably 26 percent tax upon receipt and disposal.
NFT creation: No taxes, but the sale can be taxed as capital gains.
NFT sales/trades: Most probably taxable; no deferral of NFT swaps.
DeFi lending/yield farming: Earned income taxed at receipt, disposal taxed as well.
Lost/stolen crypto: No tax relief has been confirmed.

Crypto Tax Reporting & Compliance

The Italian citizens are required to declare their crypto holdings and profit every year using tax returns like Modello 730 (employee) and Modello Redditi PF (investor or foreign assets). Particular sections are:

Form RT: To declare capital gains.
Form RW: To report crypto assets held abroad.

The deadlines on filing are:

Modello 730, September 30.
Modello Redditi, 31 October.
Registered mail Late filing until November 30 was permitted with respect to some non-residents.

It is important to keep records correctly, date of transactions, wallet address, EUR amount, and type of transaction.

Tax Deductions & Exemptions

The losses made on crypto can be set against gains made in the same year and carried over to five years. Trading losses are deductible, but scams and theft are not clearly provided. The old capital gains exemption of 2000 Euros expired on December 31, 2024, but has not been eliminated in old tax years. Gifts to recognized charities can be deductible to 10% of yearly earnings or euro 70,000.

Enforcement & Penalties for Non-Compliance

The Italian Revenue Agency is employing KYC-compliant exchanges, DAC8 automatic information exchange, blockchain forensics to track the transactions. Penalties include:

Penalties of 3-15% of the amount of crypto not declared.
The late declaration exceeding 90 days is subject to a fixed fine of 258.
Misreporting can elicit audits, back taxes, and interest.

Enforcement is assisted by the registration of crypto exchanges in Italy with the OAM and the local AML and transparency regulations.

Future of Crypto Taxation in Italy

The 2025 Budget Law can raise the crypto capital gains tax to 42%, which can make Italy one of the most taxing crypto countries in the EU. This may discourage crypto investment on the bigger MiCA (Markets in Crypto-Assets Regulation) EU harmonization.

Nevertheless, new residents are still offered tax breaks, and the portfolio tax options are simplified, which provides an opportunity to high-net-worth individuals and crypto-savvy immigrants.

Conclusion

The taxation of cryptocurrency in Italy is developing fast, and millions of investors are influenced by the reforms. It is important to know the rates that apply, reporting obligations, and compliance regulations to prevent heavy fines.

Although such tools as Koinly and Blockpit may assist in simplifying the calculations, it is highly recommended to refer to a licensed tax professional to plan according to their own needs and to have peace of mind.