Italy’s first statutory crypto tax framework took effect

Italy’s first express statutory framework for taxing crypto-assets took effect on January 1, 2023, replacing a system that had depended substantially on administrative interpretation with provisions written into national tax law.

Law No. 197 of December 29, 2022—the 2023 Budget Law—had been published in Italy’s Official Gazette on December 29. Its general effective date was January 1, and the crypto provisions in Article 1, paragraphs 126 through 147, were not among the measures given an earlier start.

The development mattered beyond the applicable rates. Italy had placed a broad definition of crypto-assets, taxable transactions, loss treatment, valuation choices and reporting mechanisms inside legislation for the first time.

What entered the tax code

Paragraph 126 added a new category of “miscellaneous income” to Italy’s Consolidated Income Tax Law. It covered capital gains and other proceeds realized through redemption, sale for consideration, exchange or holding of crypto-assets when the relevant amounts were no less than €2,000 in aggregate during the tax period.

The law defined a crypto-asset as a digital representation of value or rights capable of being transferred and stored electronically using distributed-ledger technology or similar technology. That wording was broader than a rule limited to bitcoin, payment tokens or assets marketed as currencies.

For individuals acting outside a business activity, the new income category was brought into Italy’s substitute-tax system at a 26% rate. The rule did not make every token-for-token transaction taxable: an exchange between crypto-assets having the same characteristics and functions was expressly excluded from realization. On January 1, however, the boundary created by “same characteristics and functions” still left room for interpretation.

The statute also made documentation central to calculating gains. A taxpayer was responsible for establishing acquisition cost with certain and precise evidence; without that evidence, the statutory cost could be treated as zero. Proceeds generated merely through holding crypto-assets were taxable without deductions under the new provision.

A January 1 valuation election

Paragraphs 133 through 137 created an optional method for assets held on January 1, 2023. Instead of retaining historical acquisition cost, a taxpayer could elect to use the asset’s value on that date as the tax basis by paying a 14% substitute tax on that value.

That was a basis-reset election, not a general 14% tax on crypto profits. Its usefulness depended on the relationship between documented cost, the January 1 value and future disposal proceeds. The legislation also prevented the elected value from being used to manufacture deductible losses under the new regime.

Separate provisions offered a route for eligible taxpayers to regularize previously undeclared crypto holdings. Those provisions carried their own evidentiary requirements, payments and penalties and were distinct from the ordinary 26% treatment of gains.

Holdings and intermediaries

The Budget Law extended Italy’s tax-monitoring language to crypto-assets and accommodated crypto within declaration, administered-savings and managed-savings mechanisms. This created potential operational roles for qualifying intermediaries and virtual-currency or digital-wallet service providers, rather than leaving every calculation solely outside established tax-administration channels.

Paragraphs 144 through 147 also introduced an annual charge measured at 0.2%—two per thousand—through stamp-duty or corresponding value-tax provisions. The precise route depended on how and where the assets were held and whether an intermediary applied stamp duty. It should not be described as one identical levy collected directly from every wallet in every custody arrangement.

Why the effective date mattered

January 1, 2023 marked a change in legal architecture, not evidence of a cryptocurrency market reaction. No price movement can be attributed to the Italian law from the legal record alone, and this reconstruction makes no such calculation.

The immediate significance was institutional: Italian taxpayers, advisers, exchanges and custodians began the 2023 tax period with crypto-specific statutory categories and recordkeeping consequences. The law supplied a national framework while leaving practical questions—including asset classification, acceptable valuation evidence and the scope of equivalent-function exchanges—to implementation and interpretation.

Later institutional confirmation

Later in 2023, the Bank of Italy’s Financial Intelligence Unit described the Budget Law as introducing tax rules governing crypto-assets into Italian law for the first time. A January 25 KPMG analysis separately confirmed the January 1 effective date and summarized the 26%, 14% and 0.2% components. Those later records corroborate the enacted text; they do not alter what became legally effective on January 1, 2023.