Regulations on bitcoin, cryptocurrencies and blockchain are far from clear. We will try explaining what they are, and how to understand taxes on cryptocurrencies in Italy and other countries.
2018 was a key year for the world of cryptocurrencies, it saw France wanting to invest hundreds of million euros and South Korea turning around after deciding to block money transfers using virtual currencies.
In 2019 there are many changes planned regarding cryptocurrenceis and blockchain, one of these will concern the creation of laws able to give rules for payments and investments.
Taxes on cryptocurrencies in the world
There are no unified tax laws between countries around the world on virtual currenceis, although some countries like the United States, Australia, Singapore and Japan have already legislated.
Non-European countries and taxes on cryptocurrencies.
The US, which is a federal state, has given free choice to every state on legislating about the taxation of cryptocurrencies.
However, this freedom is illusory in some respects, since in all the United States it’s still mandatory to pay taxes on profits deriving from cryptocurrencies.
Points in common between USA, Australia, Singapore and Japan
- Different taxation regime between individuals and companies.
- All earnings from Bitcoin, Ethereum, and all other cryptocurrencies are taxed, such as salaries and rents.
- Taxes diversified based on the nature of profits.
Russia has only recently started taxing virtual money in a clear way, putting behind it, in fact, the regulatory holes that afflicted it.
India, despite its efforts, still has flaws in its regulations, which should be in the process of being resolved.
The case in Poland is symptomatic of the confusion that many states have regarding the functioning of cryptocurrencies.
In fact, before last summer, some Polish cryptocurrency operators had to pay more taxes than the amount they earned.
European countries that are tax havens of cryptocurrencies
In countries such as Portugal, the profits derived from the trading of crpytocurrencies, if made by natural persons, are not taxed.
No taxation even in the Netherlands, Denmark and Slovenia, even these countries can be considered tax havens for cryptocurrencies.
Taxes on cryptocurrencies, the Italy case
As in other fields such as bureaucracy, Italy is certainly not ahead of other European countries, the case of virtual currency taxation is no exception.
In Italy there is currently no unified regulatory framework, you may have to pay taxes on cryptocurrencies.
All Italian legislation on cryptocurrencies is based, at the moment, on circulars drawn up by the Revenue Agency, which are nothing more than a readjustment of already existing rules.
First of all, it’s good to tell you that it is not obligatory to declare if you own Bitcoin or other virtual currencies.
With regard to commercial transactions, car sales, land, houses, rent or a simple breakfast, taxation is the same as other payments in euro.
The problem of taxation arises for new activities such as mining, in fact, no ATECO code does yet exist for a company of this type.
Small miners that with this activity can earn less than 5000 euros each year, for the Italian legal system are carrying out an activity defined as “discontinuous, irregular and impromptu”, which does not include taxation.
On the other hand, those wishing to set up a mining farm, would find their hands in an unforeseen commercial activity, and therefore without the possibility of being able to open a VAT number.
The trading activity carried out with cryptocurrencies is instead taxed at 26%, but in the event of controls by finance, it would be impossible to trace the origin of cryptocurrencies, since they were derived from the mining activity.
You probably understood that in regard to taxes on cryptocurrencies, Italy is not yet on par with other European countries.
It is desirable for the legislator to issue ad hoc laws for the world of cryptocurrencies and blockchain in general.
This post is also available in: Italian