The Italian Revenue Agency, with its response to decision No. 437 of August 26, 2022, clarified that cryptocurrency stacking activities must be considered as capital income, to be reported within the RL panel of the “Modello Redditi”.
1. The position taken by the Agency with its reply No. 433 of 24 August 2022
In its previous answer 433 of August 24, 2022, the Italian Revenue Agency stated that if a compensation in cryptocurrency received by individuals outside the business activity, for the strike activity, was credited to the wallet by an Italian company, the latter would have has to apply a withholding tax at the rate of 26 percent in accordance with Article 26, paragraph 5, of Presidential Decree No. 600 of 29 September 1973.
Consequently, the wallet holder would not have had to declare anything in his income tax return after suffering a withholding tax.
Inner answer 433 remained valid that the compensation in cryptocurrencies of the strike activity can be classified as capital income within the meaning of Article 44c. 1 late. h of the Tuir.
Furthermore, as explained in Circular No. 165/E of 24 June 1998, the existence of any relationship through which a capital investment is made is sufficient for the existence of capital income, including relationships that are not based on correspondence, i.e. where there is no agreement between the use of the capital and the income earned.
2. The change of direction with answer 437 of 26 August 2022
In his subsequent reply to judgment no. 437/2022 dated August 26, the Italia Revenue Agency once again deals with the issue of compensation for cryptocurrency strike activities carried out – outside the business activity – by an individual resident in Italy and paid by a resident company.
After revocation of the explanations contained in Circular No. 165/E of 24 June 1998, the Agency declares that cryptocurrency compensation received by individuals outside the business activity for strike activities is subject to tax in terms of the aforementioned letter h) of paragraph 1 of article 44 of Tuir and therefore, if it is An Italian company is credited in the wallet, the latter is required to apply withholding tax at the rate of 26 percent pursuant to Article 26, paragraph 5, of Presidential Decree No. 600/1973.
However, contrary to what was said previously, in this recent reply the Agency points out that since the petitioner is a natural person resident in Italy, such compensation will have to be subject to withholding tax by the Company and by the taxpayer indicated in Section become IA “Capital Income” of Annex RL of the “Modello Redditi”
Regarding tax monitoring obligations, repeat answer no. 437/2022 that, considering that the taxpayer keeps the wallet with an Italian company, he is not subject to tax monitoring obligations, nor the payment of IVAFE.
Regulatory framework: Local Regulation:
Legal practice:
Please visit our website arlettipartners.com or contact us at [email protected] to find out more about our services and how we can assist you.
