What the government will do on cryptocurrencies and what Bankitalia thinks about it
The budget maneuver introduces an overall tax discipline of cryptocurrencies for which until now the tax rules had not found an express arrangement and the evaluation of the Bank of Italy
Cryptocurrencies finally enter the radar of an Italian government. Ignored until now, they appeared for the first time in a law when the new executive mentioned them in the 2023 Budget Law.
They write on BTC Sentinel , there are mainly three laws on which they get their hands:
TUIR – Consolidated text of income taxes
DPR, 22/12/1986 n° 917, GU 31/12/1986 in force since 1 January 2022.
LEGISLATIVE DECREE 21 November 1997, n. 461
Reorganization of the tax discipline of capital income and other income, in accordance with article 3, paragraph 160, of the law of 23 December 1996, n. 662.
DECREE-LAW 28 June 1990, n. 167
Recording for tax purposes of certain transfers to and from abroad of money, securities and valuables.
WHAT THE GOVERNMENT WANTS TO DO WITH CRYPTOCURRENCIES
The budget maneuver introduces an overall tax regulation of crypto-assets for which until now the tax rules had not found express accommodation, except through interpretations by the tax authorities (with which the phenomenon had been traced back to categories already regulated by the tax system).
There is also the possibility of regularizing crypto-assets held in previous years. From 2023, the proceeds deriving from these activities will be taxed as other income, with methods similar to those envisaged for financial activities; as with the latter, there is also an annual levy on the value of the crypto-assets held.
The possibility of making use of the "administered" and "managed" savings regimes is extended to investors in crypto-assets, which entrust the collection and management of the related tax obligations to intermediaries. To this end, in addition to traditional financial intermediaries, the fulfillment of tax obligations relating to crypto-assets may rely on crypto-asset service providers and wallet managers (required to register in the appropriate section of the register kept by the body of credit and financial brokers).
For companies, the taxation of the proceeds of crypto-assets is arranged only at the time of their realisation. Natural persons, simple companies and non-commercial entities are granted the possibility of regularizing the tax obligations relating to crypto-assets held in previous years. Finally, for crypto-assets held on 1 January 2023, there is the possibility of "releasing" the capital gains accrued up to that date through the payment of a substitute tax of 14 percent.
THE JUDGMENT OF BANKITALIA
The introduction of a specific tax discipline for crypto-assets makes it possible to give greater certainty to operators and investors, adapting the tax system to one of the most significant evolutions of recent years. In a recent communication , Fabrizio Balassone , head of the economic structure service of the Department of Economics and Statistics of the Bank of Italy recalled in a hearing to the joint budget committees of the House and Senate on the budget law, the Bank of Italy, reiterating the importance to define a clear regulatory framework in this sector, he emphasized the need to ensure a balance between the peculiarities of the sector and the need for consistency between the tax discipline of crypto-assets and that of other assets, as well as with the legal system in general.
The solution identified – is Balassone's criticism – presents some critical issues, with particular regard to the definition of crypto-assets for tax purposes and the treatment of income from crypto-assets compared to those of financial instruments, above all with reference to the exemption thresholds and exchanges between crypto-assets, Balassone always said in the hearing on the budget law.
The definition of crypto-asset envisaged by the bill – continued the head of the Economic Structure service of the Department of Economics and Statistics of the Bank of Italy – refers to the technology underlying the conservation or transfer of crypto-assets, regardless of the other characteristics activities.
The scope of application could be better specified – Balassone pointed out -, limiting it to crypto-assets pegged in value to instruments other than a single legal tender currency in a state, to crypto-assets not pegged to any real economy activity and/or financial (including the so-called utility tokens issued against Initial Coin Offerings), and to digital tokens that represent rights to unique and non-substitutable assets (tangible or intangible) (so-called non-fungible tokens).
Digital currencies should therefore be distinguished – this is the suggestion of Bank of Italy – from crypto-assets, whose main purpose is to be used as a means of exchange and which aim to maintain a stable value with reference to the value of a fiduciary currency having legal tender in a state; the latter, if they do not refer to the euro, should be included in the category of foreign currencies.
In terms of taxation, the provision of an exemption threshold for capital gains deriving from crypto-assets (set at 2,000 euros), together with the exclusion of exchange transactions from those that can give rise to taxable income, places crypto- activity in a position of relative advantage compared to financial products, is highlighted by Bank of Italy.
With respect to the regularization of previous positions in crypto-assets, particular attention in the phase of concrete application of the provision should be placed on verifying the legitimacy of the origin of the invested sums, appropriately provided for by the law.
Towards the end of November, the governor of the Bank of Italy, Ignazio Visco , in his speech on the final day of the Payments Show in Milan had warned that on the regulation of crypto assets “we are behind, yes. However, we are proceeding on a path marked out for a long time. I imagine that there will be an answer not only from us, but globally: in the US, where there is more resistance, it is important that there is an answer”. In Europe, he added, "we have a regulation of crypto-assets in place which is in the process of being adopted: it is called Mica and has the objective of regulating stablecoins" and provides for "a series of steps to inform citizens", he explained.
For stablecoins, Visco had called for "rules, the same rules that apply to banks when they work with customers: capital, deposit insurance and obviously well-defined governance is needed", explained Visco during his speech during which he spoke for a long time on the risks associated with the cryptocurrency system and defined that of "stablecoins in another world", capable of allowing "a very effective reduction in costs and positive results".
“Micar is a regulation not a directive once it is decided it is applied: we will start applying it from the spring. The world is changing very rapidly, we try to keep up with the speed with which it changes and it is said that we will always be able. Where there are no rules, new proposals can emerge, it is important to have not only regulatory tools but also observation skills”, he hoped.
While on Bitcoin the number 1 of Bankitalia had sunk: “it's a bet, we can prevent bets but if there is pleasure for the game, let it be played. You have to be careful. We can't police bets, but we can regulate them. The same goes for crypto-assets”, added Visco: “It is a complex path, we are aware of the need to guarantee rules that are well known and also applied”. For the governor of Bank of Italy "the attempt is to always be in time with change, for now we are but even in our country there can be problems for those who invest recklessly: we must prevent this from happening".
Words that seem to follow those of the ECB towards Bitcoin, published in a post on the bank's official blog with the emblematic title: "Bitcoin's last stand". The authors of the article – Ulrich Bindseil and Juergen Schaaf – call it an “artificially backed” cryptocurrency that “should not be legitimized by regulators or financial firms, as it is similar to gambling”.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/cosa-fara-il-governo-sulle-criptovalute-e-cosa-ne-pensa-bankitalia/ on Tue, 06 Dec 2022 10:39:40 +0000.