Italy Considers Tax on Bitcoin Speculation

Rage Commentary : The Italian Taxation Bureau announced that Bitcoin will be subject to VAT as a digital currency. Some people questioned that this resolution conflicts with Italian laws and accounting standards and increases instability for some companies. This move is also different from the general practice in the world. Therefore, it is not known whether the resolution will be implemented in the end.

Translation: Annie_Xu

New documents show that the Italian tax agency (Agenzia della Entrate) is ready to recognize Bitcoin as a currency.

The ATO, Italy’s top tax authority, made new announcements about digital currencies this month, months after a European Union court ruled on how to levy VAT on transactions using the technology.

According to the Italian tax agency, transactions using Bitcoin will still not be subject to VAT, echoing a decision by the European Court of Justice (ECJ) last October. However, the tax agency document shows that speculation in Bitcoin will be subject to income tax, as long as it involves transactions in Bitcoin.

The tax bureau issued the rule in response to a request from a local business, which it did not name, and bitcoin transactions outside of bitcoin speculation activities are not subject to the income tax.

Therefore, the tax bureau actually treats Bitcoin as a currency, which is different from the current global Bitcoin tax management.

Imperfect ruling?

However, at least one analyst pointed out problems with the IRS's decision.

Italian certified public accountant and tax consultant Stefano Capaccioli wrote in a blog post that the resolution adds a new element of instability to companies involved in digital currency transactions.

In particular, although the tax authorities want to tax Bitcoin, Italian law itself will not recognize it. And he pointed out that Italy's current accounting standards are also in conflict with the resolution.

“It creates more problems than benefits.”