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Italy: a loophole discovered in the law on crypto taxes

Author: Content Editor
Cryptocurrency expert Stefano Capaccioli has discovered a loophole in the law that regulates crypto taxes in Italy. The flaw stems from the methodology with which laws are modified in Italy, where texts are added to subsequent documents rather than rewritten. This has resulted in a lack of comprehensive text for Italian laws, requiring them to be reconstructed. The specific issue is found in paragraph c-sexies of article 67 of the Tuir. The problem arises from the fact that in 2014, when DL 66/2014 was approved, letter c-sexies did not exist in article 67 of the Tuir. However, in 2022, the Budget Law for 2023 added letter c-sexies for crypto-assets. This created a discrepancy in the tax rate, as the law introducing a new rate for the taxation of capital gains did not explicitly include letter c-sexies. As a result, the rate of 26% was incorrectly applied instead of the original rate of 12.5%. Capaccioli's discovery means that the rate to be applied to capital gains from crypto-assets will be 12.5% instead of 26%, and those who have already paid the higher rate can request a refund. The Italian government is also considering increasing the rate to 42% in the provisional text of the Budget Law for 2025, but this is not favored by most parties. The Lega has promised to propose an amendment to modify the rate. However, any changes will not be retroactive, so the rate will remain at 12.5% for the period of 2023-2024. The software of the Agenzia delle Entrate, the Italian tax agency, was programmed to apply the incorrect rate due to the lack of awareness of the issue. The research offices of the Chamber and the Senate, as well as the government, were aware of the problem shortly after the approval of the Budget Law in 2023 but did not take action to amend the law.

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