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Cryptocurrency taxes: how to calculate from 2023?

Our insights into taxes and cryptocurrencies continue. As foreseen in previous contributions, a part of the text of the Newborn Law No. 197/2022 has been devoted to this subject. Here we will deepen the art. 33 of the bill titled “Redetermination of the value of crypto assets”.

Let’s see what it is and how it affects the calculation of taxes on cryptocurrencies.

Cryptocurrency taxes: how to calculate purchase cost?

Let’s start with a premise. The difference between the price received from the sale of cryptocurrencies and the cost of their acquisition can result in capital gains or losses. As stated earlier, the cost of purchase must be documented by the taxpayer with certain and precise elements. In their absence, the cost is assumed to be equal to zero. Anyone with the slightest experience in DeFi is well aware of how complex it is to try to restructure the cost of purchasing a particular crypto asset. Not to mention the fact that it is not clear to date when taxpayer-generated documents can be characterized by elements of certainty and certainty.

In the absence of these elements, we imagine that the cost of purchasing a cryptocurrency that appreciates over time could go down to zero. In other words: the probability of paying a replacement tax of 26% on 100% of the price received is particularly high. In this regard, Article 133 of the 2023 Budget Law “came to the rescue”: According to the latter, For each crypto-asset held on January 1, 2023, the value on that date can be considered the cost of purchase.. In practice, the taxpayer is given the opportunity to recalculate the purchase cost of cryptocurrencies held on January 1, 2023.

By doing this, the difficulties arising from the long and expensive process of restructuring the original purchase cost will be eliminated, since in fact one only has to consider the value of cryptocurrencies as the purchase cost on January 1. But at this point the question arises.

Cryptocurrency taxes and revaluation as of January 1, 2023

What value? How is it possible to harmoniously re-determine purchase value in the absence of a regulated market? In the text of the law, it would be more appropriate to include the expert opinion requirement carried out by the certified public accountant, as suggested by the Law. Capaccioli Studioincrease the precision and accuracy of audit evidence supporting taxpayers.

Second, it will be able to reassess the cost of purchasing cryptocurrencies under one condition: payment 14% replacement tax payable until 30 June 2023. The law also allows this tax to be repaid every 3 years in the same amount by paying an additional 3% annual interest.

However, a potential criticality is perceived from the literal meaning of the provision. The text of the law is as follows:For each crypto-asset held as of January 1, 2023”. If the person turns to revaluation, consider the amount of all crypto assets heldis limited to a particular blockchain or protocol. For example: If I decide to revalue my Bitcoin as of January 1, 2023, I will need to consider all of my BTC holdings, regardless of the various exploitable holding modes.

The question many will be asking right now is: Does choosing to revalue my assets allow me to save money and reduce taxes on my cryptocurrencies? The replacement tax of 14% is definitely lower than the “ordinary” tax of 26%, but it is advisable not to be too hasty. Only an in-depth study of the individual situation can lead wisely to the right choice aimed at optimizing one’s tax burden on cryptocurrencies.

Check out other articles by certified public accountant and statutory auditor Giammarco Brega. Budget Law 2023:

Giammarco Brega (Studio Brega) is a Certified Public Accountant and Legal Auditor, born in 1988. He is engaged in tax and financial consulting, business planning and subsidized finance.
In 2015, he founded CB Digital Company Srl, a social media marketing company with a friend, with a dual goal: to support multinational brands in developing communication strategies and to promote the digitalization of SMEs.
He loves to discuss innovation: for several years, blockchain technology and the dynamics of the token economy have become his passion, and promoting their use by SMEs is one of his goals.

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