Cryptocurrencies and tax returns: how it works and what to fill in

The cryptocurrency is a digital currency, which, like any other currency, has an exchange and buying and selling function. Consequently, even though they are digital transactions and even though they have no real physical form, cryptocurrencies must also bedeclared in tax returns. 

Why is it important to declare cryptocurrencies?

Declaring cryptocurrencies can be useful on several fronts: from a tax point of view, it is important to have a general overview of the performance of a particular currency, also from an economic and investment perspective. For those in digital currencies, however, it is an important procedure, because it allows one to have a much clearer and more defined general overview, so as to choose which path to take next. 

The Italian Revenue Agency has taken a rather clear stance on the matter: every transaction, transfer, exchange or sale inherent in cryptocurrencies must necessarily be notified and declared, subject to taxation in accordance with the regulations in force in the year of the declaration.

A delicate and precise operation 

The declaration of cryptocurrencies, therefore, must be carried out with great care, taking care to cover all the most important steps. For everything to run smoothly, therefore, the advice is tokeep track of every transaction related to cryptocurrencies, like a sort of logbook but more like a business expense report. 

How to Declare Cryptocurrencies Without Mistaking

Filling out your tax return has a varying level of difficulty depending on the type of transactions you carry out during the year. If we are in the possession of cryptocurrencies, however, we may need the support of specialised software or even a tax advisor to help us fill out all the documents as correctly and transparently as possible. 

To keep track of these operations, but also to better manage the flow of information related to digital currencies, we can also use specific applications or crypto software that can provide us with real guidance. Another very useful tip concerns the possibility of taking screenshots of individual transactions, as well as of the wallet where cryptocurrencies are stored. It is very important to take photos or screenshots even at topical times of the year, such as 31 December, so as to ensure that we ourselves have as accurate a history of our movements as possible. 

Declare cryptocurrencies: yes or no?

Is it mandatory, then, to declare cryptocurrencies when filling out your tax return? The answer is yes - and it has been compulsory for a few years now, thanks to a number of circulars first issued by the Agenzia delle Entrate and later confirmed by the Budget Law of 2023.

Anybody in possession of cryptocurrencies must fill in the so-called RW Form, the one also relating to investments and financial assets abroad. As with any documentation required by the Internal Revenue Service, it is advisable to make this declaration within the deadline. It is very important to declare any form of cryptocurrency, regardless of its volume. It does not matter, therefore, whether we are in possession of one, five or 100 euros in digital coins, be it Bitcoin, Dogecoin or Ethereum. 

The world of cryptocurrencies is constantly changing and keeping up with all the news could be a challenge. That's what SpazioCrypto is here for: if you want to keep up with updates on the crypto world, follow SpazioCrypto, add it to your favourites and check out the cryptocurrency guide.