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Shocking: the well-known accountant and cryptocurrency expert, Stefano Capaccioli, has discovered a loophole in the law that regulates crypto taxes in Italy.
This is an unintentional technical flaw due to the methodology with which laws are modified in Italy.
The issue, therefore, is purely technical, but Capaccioli summarized it in a recent video interview.
Summary
The flaw in the new law on crypto taxation in Italy
In Italy, when a law is modified, the text is generally not rewritten, but texts are added in subsequent documents.
This means that often there is no single comprehensive text of Italian laws, and that it therefore needs to be reconstructed by putting together, in chronological order, different texts from different documents.
In the specific case, the problem is in paragraph c-sexies of article 67 of the Tuir.
Everything starts from paragraph 2 of article 5 of DL 66/2014 related to the different incomes of article 67 of the Tuir.
In 2014, when DL 66/2014 was approved, paragraph 1 of article 67 of the Tuir ranged from letter c-bis to letter c-quinquies. In other words, at that time, letter c-sexies did not exist.
At the time, however, Italian law did not explicitly recognize cryptocurrencies (referred to as crypto-assets in legal jargon in Italy), and thus, following paragraph 1 of article 67 of the Tuir, letter c-sexies was added, specifically relating to crypto-assets.
However, this addition was made later, at the end of 2022 in the Budget Law for 2023, that is, years after DL 66/2014.
The fact is that that Decree Law from ten years ago introduced a new rate for the taxation of capital gains from miscellaneous income under article 67 of the Tuir, but only up to letter c-quinquies, since letter c-sexies did not exist at that time.
The new rate was 26%, while the previous one was 12.5%.
Despite the belief that this rate increase applied to all different incomes of article 67 of the Tuir, Capaccioli instead discovered that the law states textually that it also applies to paragraph c but only up to letter c-quinquies. That law, in fact, obviously made no mention of letter c-sexies, because it did not exist, but explicitly specified that the new rate was to be applied only up to letter c-quinquies.
The reduction of crypto taxes in Italy after the discovery of the flaw
The Budget Law approved at the end of 2022 came into force in 2023.
This year, those who had obtained capital gains from the sale of cryptocurrencies in 2023 had to pay taxes according to the new regulations, the one included in the 2023 Budget Law approved at the end of 2022.
Until the discovery by Capaccioli, made only in these last days of October 2024, practically everyone was convinced that the rate to be applied to the taxation of capital gains from sales of crypto-assets in Italy was 26%, as for other miscellaneous income.
Instead, the original rate of 12.5% should have been applied, since the one introduced in 2014 could not be applied to letter c-sexies of paragraph 1 of article 67 of the Tuir related to crypto-assets.
This means two things.
First of all, even in 2025, when taxes on any capital gains from 2024 are paid, the rate to be applied in this specific case will be 12.5%, and not 26%.
Furthermore, it also means that those who have already paid the 26% can request a refund.
On the other hand, the text of the law, if reconstructed and read correctly, states without a shadow of a doubt that the 26% rate should not be applied to crypto capital gains, but the original rate of 12.5% should be.
The modifiche
The reason why no one had noticed it until now, not even the legislator, is twofold.
Firstly because the Italian law is complicated, written with a methodology of updating that is not simple and not linear.
The second is that until October 2024 there had never been a valid reason to delve into the issue.
In fact, in this very October 2024, the Italian government has decided to include in the provisional text of the Budget Law for 2025, which must be approved before the end of 2024, the modification of the rate to 42%.
If Parliament were to approve that text, starting next year the tax rate on crypto in Italy will increase from 12.5% to 42%.
This increase to 42% in reality, however, is not liked by almost anyone, so much so that four out of the five main Italian parties have declared themselves against it.
In fact, the second largest party of the government majority by number of seats in Parliament, the Lega, has promised that it will propose an amendment to Parliament to modify that rate, and this should also solve the problem generated by the flaw discovered by Capaccioli.
It remains quite certain, however, that such a change in the rate will not be retroactive, so for the two-year period 2023/2024 it will remain at 12.5%.
The height
But there is also more than all of this.
First of all, it must be said that even the software of the Agenzia delle Entrate was programmed to apply the incorrect rate of 26% instead of the correct one of 12.5%, because before Capaccioli’s discovery absolutely no one had raised this issue.
In other words, even those who wrote the 2023 Budget Law that introduced letter c-sexies related to crypto-assets were unaware of this “problem,” namely the fact that the 2014 law that introduced the 26% rate could not have been applied to this new letter of paragraph 1.
But the most surprising thing is that a dossier from the research offices of the Chamber and the Senate dated 01/26/2023, just a few days after the approval of the Budget Law that introduced that new letter to paragraph 1, invited the Government to consider amending the text of the 2014 law that introduced the 26% rate, in order to solve the problem. However, this amendment has never been made.
Therefore, in reality, both the research offices of the Chamber and the Senate, as well as the Government, knew, already the month following the approval of the 2023 Budget Law, but no one did anything to solve the evident problem.