By George Ward
Italy, known for its stunning landscapes and delicious cuisine, has embraced its cultural heritage and the digital era. In recent years, one aspect of this transition has been the widespread acceptance and regulation of cryptocurrencies.
This guide provides a detailed overview of the cryptocurrency regulations in Italy, offering insights into how to buy cryptocurrencies, taxation, and the future of digital assets in the country.
Cryptocurrency Regulations In Italy
While the country hasn’t enacted specific laws for digital currencies, the Italian government has actively developed regulations and policies through various regulatory bodies. The good news for crypto enthusiasts is that there are no laws prohibiting the buying, selling, or holding crypto assets in Italy.
Italy’s MEF (the Ministry of Economy and Finance) is responsible for some aspects of crypto regulation, especially taxation. Earlier this month, it released updated regulations mandating crypto firms to register with OAM, Organismo Agenti e Mediatori.
The move is to boost transparency and enforce anti-money laundering measures. Accordingly, investors must choose registered crypto firms for secure transactions in Italy. Italy is working to synchronize its cryptocurrency regulations with the regulatory guidelines of the European Union.
Guide To Buying Cryptocurrencies In Italy
There are various methods to acquire digital assets for those looking to venture into the world of cryptocurrencies in Italy.
Crypto Exchanges
To buy cryptocurrencies in Italy, choose a reputable crypto exchange and create an account. Prioritize safety by opting for registered crypto firms approved by the country’s financial regulator, OAM.
Popular exchanges like Coinbase, Crypto.com, and Kraken fit the bill and provide a secure transaction environment. After registration, deposit the required funds to buy your preferred cryptocurrency.
P2P Platforms
Italy offers the option to buy crypto through peer-to-peer (P2P) platforms such as eToro, Bitpanda, and Binance. Some investors favor P2P platforms for their user-friendly interfaces and the ability to engage in social trading.
To initiate P2P trading, users sign up, finish identity verification, deposit funds, and execute buy orders or copy the trades of experienced investors.
Italian Banks
Investors can also buy cryptocurrencies through Italian banks like Banca Intesa Sanpaolo and Unicredit. While these banks don’t directly perform crypto transactions, their modern platforms allow uninterrupted fund transfers to reputable digital asset exchanges.
Are Cryptocurrencies Taxable In Italy?
Profits, losses, and diverse transactions in cryptocurrency are subject to capital gains or income tax. Yet, not all crypto activities are taxed; transactions like buying with euros, holding, and transferring between personal wallets aren’t taxable.
It’s crucial to note that some transactions lack explicit tax guidance. Lack of detailed guidance doesn’t exempt individuals from crypto taxation. Therefore, interpreting existing tax rules is crucial. Also, skipping filing in Italy attracts financial penalties, either in a fixed sum or a percentage (between 120% and 240%) of the unpaid tax.
Capital Gains And Income Tax In Italy
In Italy, taxation of crypto activities can either be capital gains or income tax, depending on the type of the transaction. In the 2023 budget, Italy unveiled a 26% capital gains tax on crypto profits over €2,000.
Italy’s income tax includes municipal, regional, and national components. The federal income tax varies from 14% to 43% of the annual income. Italy’s income tax system is decentralized, allowing regional and municipal income tax rates to change. Regional taxes can vary from 1% to 3%, while municipal taxes are often below 1%.
Meanwhile, the revised Italian crypto tax guidelines indicate that losses surpassing €2,000 in crypto investments can offset profits and be carried forward for five years. This provision allows for crypto loss harvesting, effectively minimizing tax obligations annually.
Bitcoin ATMs In Italy
Italy has fully embraced the digital currency revolution with Bitcoin ATMs scattered across various regions. Since installing the first Bitcoin ATM in 2014, these machines have allowed visitors and locals to convert banknotes into BTC or other digital currencies quickly.
Safe Storage Of Digital Currencies In Italy
For optimum safety of your digital assets, move them outside exchanges. Keeping funds on an exchange means relinquishing control over keys and, consequently, the coins.
Therefore, selecting a reputable wallet, whether hardware or software, is crucial. Accordingly, you can initiate a withdrawal from an exchange to a chosen external wallet to retain control over the private keys of crypto coins or tokens.
The Future Of Cryptocurrency In Italy
Italy anticipates the implementation of the MiCA regulatory framework this year. Furthermore, there will be significant progress in Italy’s collaboration with the Bank of Korea in 2024, focusing on interoperability in DLT (distributed ledger technology) and transactions for CBDC trials in European Central Banks.