Italy

Italy introduced a formal crypto tax framework in the 2023 Budget Law, creating a codified regime for the first time after years of uncertainty in which the Agenzia delle Entrate applied general asset disposal principles on a case-by-case basis. The framework is now structured but remains classified as developing because significant aspects — particularly the treatment of DeFi, NFTs, and stablecoins — have not been comprehensively resolved in published guidance. A major rate change takes effect from 1 January 2026, increasing the flat tax rate from 26% to 33%, making year-end 2025 positioning a material planning consideration for Italian holders. The Agenzia delle Entrate is among the most active and enforcement-oriented tax authorities in Europe.

Core Tax Treatment

Capital gains from crypto disposals are taxed at a flat rate. The rate is 26% for disposals up to and including 31 December 2025, rising to 33% for disposals from 1 January 2026 onward. There is no annual exemption from 2025 — the €2,000 threshold that previously applied was abolished. The FIFO or LIFO method may be used, with the chosen method applied consistently within a tax year. The gain is calculated as disposal proceeds minus the documented acquisition cost in euros.

Rate Change to 33% from 2026

The increase from 26% to 33% from 1 January 2026 is a 27% relative increase in the tax cost on every euro of gain. For investors with significant unrealised positions at year-end 2025, there was a strong incentive to realise gains before the rate change took effect — the saving on a €100,000 gain was €7,000. For holdings carried into 2026 and beyond, the higher rate is the new baseline. The rate change is established in law and is not subject to change for gains realised from 2026 onward under current legislation.

Same-Type Swap Exemption

Italy provides a partial exemption for crypto-to-crypto swaps involving assets of the "same type." The Agenzia delle Entrate's guidance interprets same-type swaps as exchanges between tokens that are economically equivalent — wrapping and unwrapping the same underlying asset (e.g., ETH to WETH) being the clearest example. Swaps between different tokens — Bitcoin for Ether, one altcoin for another — are taxable disposals at the applicable rate. The scope of the "same type" exemption is narrow and should not be assumed to cover standard DeFi token swaps.

The Substitute Tax Option

Italy provided a one-off option for taxpayers to step up their crypto cost basis by paying an 18% substitute tax on the market value of holdings as at 1 January 2023. Taxpayers who exercised this option effectively reset their cost basis to the January 2023 market value, paying 18% upfront on unrealised gains to that date in exchange for a higher future cost basis. This option is no longer available for new elections — it was a transitional measure at the time of the regime's introduction. Taxpayers who exercised the option should retain their documentary evidence of the substituted basis for future disposals.

IVAFE on Foreign Holdings

Italy imposes the Imposta sul Valore delle Attività Finanziarie Estere (IVAFE) — a tax on the value of financial assets held abroad — at a rate of 0.2% per year on the market value of crypto held on foreign platforms. This is a recurring annual charge on the portfolio value, not on gains, analogous in structure to Switzerland's wealth tax but at a lower rate. IVAFE is calculated on the average value of foreign holdings during the year and is declared via the RW section of the tax return.

RW Declaration

Italian tax residents must declare all foreign financial assets — including crypto held on non-Italian exchanges — in the RW section (Quadro RW) of the annual income tax return. Failure to declare foreign holdings via RW carries severe penalties: 3–15% of the undeclared amount per year, rising to 6–30% for assets held in blacklisted jurisdictions. The RW obligation applies regardless of whether any taxable disposals occurred and regardless of the size of the holding. It is one of the most significant compliance obligations in the Italian system and one of the most frequently violated.

Staking and Mining

Staking income is treated as capital income in Italy and taxed at the applicable flat rate (26% until end 2025, 33% from 2026). Mining income is treated as self-employment income or business income and taxed at progressive income tax rates, which can significantly exceed the capital gains flat rate. The income is assessed at the euro market value of tokens received at receipt.

Reporting

Capital gains are declared via the RT form (redditi diversi di natura finanziaria) within the Modello Redditi PF annual return, or via Modello 730 with supplementary forms where applicable. The RW form is mandatory for foreign holdings. The IVAFE charge is calculated and paid within the same return. The filing deadline is typically 30 November for the prior calendar year. DAC8 exchange reporting is active from 2026.