Italy To Tax Speculative Bitcoin Profits
September 9, 2016 Taxation in Italy
ROME – Italian tax authorities have confirmed that they will treat Bitcoins as a currency, unless they cryptocurrency is held for speculative purposes.
Late last week the Italian tax authority Agenzia della Entrate issued new information confirming the treatment of cryptocurrencies for tax purposes.
The new release confirmed that the purchase and sale of cryptocurrencies will be exempt from Value Added Tax.
The ruling regarding VAT effectively treats cryptocurrencies as a currency, and not an asset, a move which fall in line with recent rulings regarding the treatment of cryptocurrency.
However, if the cryptocurrency is bought or sold as a means of making a speculative profit, the arising profits shall be liable for income tax charged at the appropriate rate for the parties involved.
The move has been hailed as generally positive, however, some experts have pointed out that even though tax authorities intend to treat Bitcoins and other cryptocurrencies as a currency, the Italian legislative system does not yet recognize them as currencies, leading to potential problems due to the discrepancies.
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