Bitcoin taxation italy
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The IRS considers Bitcoin to be property rather than money, so transactions are subject to the same tax treatment as other investments. Bitcoin taxes can be triggered by trading, exchanging, or simply spending the cryptocurrency, so documenting everything is essential.
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Italy’s tax treatment of cryptocurrencies: The risks and opportunities
Capital gains tax. However, in most countries, and in the emerging academic literature, the OECD warns of a lack of comprehensive guidance or a framework for their tax treatment, which is due in part to the complexity of defining the treatment applicable to these assets, in a way that covers their different facets, as well as their complex and rapidly changing nature.
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The VAT treatment of virtual currencies is more consistent, among the countries analyzed in this report, than that of income taxes. In almost all countries, the exchange of virtual currencies is not subject to VAT. This applies whether the exchange is for legal tender or other virtual currencies.
The mere activity of using virtual currencies to purchase goods or services is also outside the scope of VAT and, therefore, the tax should not be paid on the value of the virtual currencies themselves. Virtual currencies are a means of payment and the transaction is not a barter.
The content of this website is for general information purposes only and does not purport to provide comprehensive full legal or other advice. In such a case, what at first may seem a utility token, on further analysis may reveal itself to be an investment token. This case history and the order of the Court of Brescia give us the opportunity to provide the Italian picture on cryptocurrencies. In effect, since Italy has applied a new territorial system of taxation aimed at attracting high net worth individuals, including successful individuals in the sports, arts, and fashion and design sectors, who could be interested in moving to Italy to take part in these thriving sectors. The reason they have become so attractive is that they serve a multitude of purposes: from being a cutting-edge payment method to acting as an alternative and rather unregulated means of speculating. As for determining the legal nature of cryptocurrencies, the ruling of the Court of Brescia has not shed additional light, as it merely mentioned that under Italian law, both goods and services, in addition to cash, may be paid in as share capital.
However, the provision of taxable goods and services paid with virtual currencies remains covered by VAT, as applicable. With some exceptions, for example in France and Italy, the receipt of new tokens through mining [4] is also not subject to VAT. On the other hand, the OECD warns about possible practical difficulties related to the treatment of these transactions reached under the VAT rules, including the obligation to maintain the necessary records to establish valuations and possible deductions, as well as the registration in the tax of individuals or small merchants.
In the countries of the European Union EU , the Hedqvist [5] judicial decision,considering virtual currencies like official legal tender currencies, for the purposes of the VAT Directive, has been responsible for the tax treatment that is currently applied.
Tax & Compliance Automation for Virtual Asset Service Providers
Services related to virtual asset exchanges but not part of such exchanges are treated more widely. VAT is not charged in the vast majority of countries, typically due to exemptions or provisions related to financial services. In other countries, especially outside the EU, these services are subject to VAT rules as provision of taxed services. There are a number of taxable events in the income tax, most of which occur in relation to the provision of a virtual currency for payment.
Sovos Tax Information Reporting for Virtual Asset Service Providers
Although a small number of countries do not consider the exchange carried out by individuals as a taxable event, most countries consider the exchanges between virtual currencies and legal tender to generate a taxable event. Among these countries, a handful exempt exchanges between different types of tokens from tax, with a majority considering them taxable.
With respect to the payment of goods, services or wages, the tax treatment of the underlying transaction remains unchanged.