Cryptocurrencies are a booming financial trend. The first to be introduced, as well as the most popular, is the Bitcoin, present since 2010, although the conception at the conceptual level dates back to 2008. In this article we try to shed light on one of the central and highly topical issues when it comes to bitcoin and taxation, offering a simple, but no less comprehensive and useful guide to tax returns.
What the Italian law says
The first thing that is important to know is that with regard to bitcoins, the Internal Revenue Service provides for the 'Mandatory inclusion in the tax return. Otherwise, you will run into some Important risks, beginning with those of a sanctioning nature, according to an amount between 3 and 15% for what is undeclared, capable of reaching percentages between 6 and 30% should situations such as blacklisting arise. Not only that, if bitcoins in the tax return see an annual income of more than 50 million, there is even the imprisonment.
As you can see, bitcoin tax returns should not be taken lightly. The penalties and risks of facing major issues are real, which is why they should never be underestimated. It is necessary to keep in mind that the checks by the Guardia di Finanza are particularly active-all the more reason to protect yourself, since the consequences are real.
Italy was among the first states to offer a clear overview regarding bitcoin and taxation. It has done so with a view anti-money laundering and in accordance with the provisions of theArticle 4 of Decree Law 167/90, in which it obligates bitcoin holders to file them on their annual tax returns.
What is fiscal monitoring
The fiscal monitoring is unavoidable for cryptocurrency and bitcoin holders. It consists of the need to notify the tax authorities that there are foreign-type assets, as cryptocurrencies and bitcoins are precisely, that are capable of generating taxable type income at the tax level.
In simple words, it means.even if cryptocurrencies do not generate wealth, they still need to be declared. Fiscal monitoring does not see the payment of no tax: thus consists of alerting the state that you are in possession of a particular asset such as cryptocurrencies.
That is, as long as the stock is not more than 51,645.69 euros for seven consecutive days: Should this occur, it will be essential to make a substitute tax payment of 26%.
Despite the fact that the state has been unequivocally clear on this issue, there are a number of people who take the issue of including bitcoins in their tax returns lightly. It, on the other hand, requires special attention, given the risks involved in case of noncompliance, which, as we have mentioned, are absolutely noteworthy, at the level of penalties and more.
What is at risk in case of noncompliance
Bitcoin tax reporting is something that, if not done, even when it does not generate direct income risks having decidedly unpleasant consequences. If tax monitoring is not achieved, the risk is to pay a Penalty ranging from 3 to 15% over the final undeclared amount: also important numbers given the considerable value that cryptocurrencies present.
The situation worsens in case one finds oneself in cases related to blacklist or tax havens In which the failure to declare bitcoins to the IRS goes 6 to 30% In relation to the unreported amount.
Things get even more complicated should you not include bitcoins in your tax return and their value turns out to generate an annual income capable of exceed 50,000 euros. Since evasion is considered to be over 50,000 euros annually, the law provides the person with a situation such as that of imprisonment.
Let us conclude, then, by saying that not declaring cryptocurrencies is a great risk and even a major mistake, given the important consequences that such an act entails. All the more reason to choose to Rely on professionals who can handle the tax issue in the appropriate manner, which is imperative they present a specific specialization on the subject and remain up-to-date on the relevant provisions, proving capable of meeting deadlines.
In any case, it is important to keep track of their activity. Particularly useful in this regard are the latest computer technologies, which make it possible to note on computer files such as excel files, to be kept on your smartphone, all cryptocurrency movements. A solution both to always be in control of one's finances and to verify and even direct the work of the accountant in the case of the introduction of bitcoins in the tax return.
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