Tax management of crypto-assets: tools and strategies


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In light of the new provisions introduced with the recent Finance Act, it becomes of paramount importance on the one hand to plan for cash out, and on the other hand to be able to analytically reconstruct (as far as possible) the past movements and historical value of one’s cryptocurrencies: both to keep an eye on the tax burdens that may result, and to be able to effectively protect oneself in case of audits by the tax authorities.

Tax and the possession of crypto

When the movements or the size of cryptocurrency wallets to be reported are small, this can be handled simply and “empirically.” But when the movements are numerous and perhaps close together (as is the case with particularly experienced and dedicated users of intensive trading practices), or when one has been trading on numerous different crypto platforms, having the technological support of an application becomes essential to facilitate all the work of monitoring and reporting on the movements and countervalues of one’s digital assets.

There are few applications that allow this kind of monitoring and reporting on the market. There is one that has the unique feature of being designed to connect with Italian tax regulations: it is Cryptobooks.

The application allows users to connect the wallets and exchange accounts they use in a single solution to keep track of all cryptocurrencies held and facilitate compliance with Italian crypto tax laws and regulations.

It also allows users to automatically create all tax reports on their crypto-assets, such as one on capital gains, stocks, commissions and others, to be able to deal with any tax assessment without worries.

To find out more, we interviewed the CEO of the company that developed and markets it: Federico Pacilli.

Q. With the regulations approved within Finance Law 2023, compared to the previous total absence of positive tax law regulations, we now have a regulatory framework that, if nothing else, establishes a set of principles regarding taxes.With respect to this new regulatory framework, how does CryptoBooks help the cryptocurrency holder to be more “compliant” with the new tax provisions?

A. CryptoBooks has already incorporated the developments in cryptocurrency taxation introduced by the latest regulations in order to be able to provide its users with reports that are more compliant with Italian law. In addition, as soon as the final measure of the Italian “Agenzia delle Entrate” (tax authority) comes out, which will clarify the latest operational aspects, we will release new reports that will further help taxpayers to consciously orient themselves on the regularization of past returns and also on the convenience of revaluing their cryptocurrencies.

Q. Operationally, how should cryptocurrencies be declared in the next tax return? And how can Cryptobooks facilitate the filing of returns?

A. From 2023 onward, the declaration of the RW and RT framework of the income tax form will be mandatory, and with CryptoBooks we are already able to create compliant reports for filling out these forms. It is useful to point out that the reports provided contain all the information to determine the best declaration strategy, together with your accountant, and enter the correct figures in the frameworks of your return.

Q: Cryptocurrency traders often find themselves operating on multiple platforms. If you have numerous transactions, how do you report them correctly to know exactly what the taxable income is? How can Cryptobooks facilitate this type of reporting?

A. What is asked of our client is to link their crypto platforms and indicate the public addresses of their wallets so that all cryptocurrency transactions are automatically downloaded by our software; at that point, CryptoBooks provides all the tax reports necessary for proper reporting. Cryptocurrency tax reporting is very complex, think of the multiplicity of cryptocurrency transactions such as: staking, lending, borrowing, trading or simple NFT ownership, it is necessary to apply accounting principles to each of these types of transactions. Our peculiarity is that we have made this complissity affordable for everyone. 

Q: If a user has been holding cryptocurrencies but has never previously declared their crypto assets, what do they risk? And how can he or she become compliant?

A. Failure to declare carries penalties that can reach, in the most serious cases, 30% of what has not been declared: a real bloodbath. Fortunately, the current “Amnesty” (so improperly called) allows one to regularize one’s crypto under decidedly favorable conditions. With CryptoBooks, we help cryptocurrency holders make the calculations and adjust the past years. 

Q. In conclusion, how can CryptoBooks help the crypto investor adopt the best declaratory solution?

A. CryptoBooks’ reports, which are the most reliable that any software can process, offer all the essential information necessary to be able to establish an effective declarative strategy that is based on correct calculations-essential elements for paying only the taxes owed and not a euro more. Our solution provides a number of functions that are unique in the industry and essential to have square calculations accounted for: we automatically track mismatches between balances and transactions on exchanges, we monitor cryptocurrencies that do not have load prices and highlight them to the client, we track transfers between different user sources in order not to miscalculate capital gains.

CryptoBooks provides 4 different subscription plans to meet every need.

Now, since actions are worth a thousand words, we thought we would offer Cryptonomist readers the opportunity to purchase Cryptobooks with a 25% discount on the purchase of the chosen plan.

For this, we have activated a promo code dedicated to those who read The Cryptonomist: just create a CryptoBooks account and then, during the purchase, enter the code CB-CRYPTONOMIST-25 within the required field.

To sum it up, Cryptobooks presents itself to the market as a tool that can make life much easier also from the point of view of tax compliance and also of possible prospects for audits and litigation, in a system, as is the Italian regulatory and tax system, that too often, amidst regulatory loopholes and shortcomings, results in a kind of minefield for users and operators.

The final word of course remains with the market and end users, but the product has extremely interesting features.