IRS and Bitcoin: the state may collect up to 1 billion in 2024
For the first time in Italy, taxation on cryptoassets, a concept included in the Tuir, has been regulated. So, it is time to
take an initial stock. And some forecasts in terms of additional revenue generated by this new levy.
Gianluca Massini Rosati President of Allcore S.p.A. for We-Wealth
The green light from the SEC, which for years had been staunchly resisting the Bitcoin ETF, has brought cryptocurrency permanently into the mainstream finance arena. No longer an anarchic alternative currency, but an investment tool now enshrined even by the regulator, while large traditional banks have been selling it to their customers in various forms for years.
For the sake of the record, it should be mentioned that since the ETF has been listed, Bitcoin has lost more than 10% of its value: but this is probably because it had already run on anticipation and subsequently caught its breath. Meanwhile, in Italy, many are wondering how the first year of revenue collection will go following the introduction of the 2023 budget law.
Yet numbers on the amount of crypto circulating in our country do exist, thanks in part to the monitoring of entities and consulting firms that deal with the bitcoin market on a daily basis. One of these is the OAM (Organismo Agenti e Mediatori), which collects quarterly reports from VASPs (Virtual Asset Service Providers) from which cryptocurrency-holding clients transact. According to the latest report published on June 30, 2023, it shows that the sum of cryptocurrencies in the hands of Italians on that date was 1.23 billion euros (120 million euros less than three months earlier), with a total of 895,291 tracked entities of which almost all are individuals, with an average wallet size of 1,377.41 euros.
The new regulations on crypto assets
In fact, in March last year, a requirement was included in the TUIR (Consolidated Income Tax Act) for holders of cryptocurrencies, aka Bitcoin and all its likes, to bring these values to their tax returns and pay taxes on them.
The year 2024 is here, and it is time for forecasts and budgets: how much could come into the state coffers from taxes on buying and selling Bitcoin? The answer is by no means simple, as cryptocurrencies are a relatively young and elusive instrument for those who studied finance, economics, and law before the 2000s (the first Bitcoin came to market on January 3, 2009), and the Legislature itself has struggled to stitch coherent legislation around it.
The possible tax revenue
The OAM figure is likely underestimated because it does not consider all cryptocurrencies held in DeFi or noncustodial wallets. However, based on June 2023 OAM data of 1.23 billion euros of Bitcoin in wallets, and assuming-as some industry analysts suggest-that Bitcoin could be worth $100,000 by December, we can estimate that the wallets of Italians could be worth up to 5 billion euros. If everyone sold, the state could collect more than 1 billion in taxes.
If we consider, on the other hand, the current price of Bitcoin, or $42,000, the tax revenue due to capital gains taxes could be around 300 million euros. To give a term of comparison, stamp taxes on 2023 could generate revenue for the treasury of around 5 billion euros. Another indirect tax, such as the much-victimized Rai licence fee, raised 1.4 billion euros in 2022.
In short, additional revenue not to be despised, though at present only potential.
If you own more than €20,000 in crypto and want to avoid the heavy hand from the IRS, Book a free consultation with one of our experts.
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