Tax management of crypto assets – The Cryptonomist
In light of the new provisions introduced with the new Finance Act, it becomes of the utmost importance on the one hand to plan for payments, and on the other hand to be able to analytically reconstruct (as far as possible) previous movements and the 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 themselves from audits by the tax authorities.
Tax and ownership of crypto
When the movements or size of cryptocurrency wallets to be reported are small, this can be handled easily and “empirically”. But when the movements are many and perhaps close together (as is the case with particularly experienced and dedicated users of intensive trading practices), or when one has traded on many different crypto platforms, it becomes important to have the technological support of an application to facilitate all the work with monitoring and reporting on movements and counter values of one’s digital assets.
There are few applications that allow this type of monitoring and reporting on the market. There is one that has the unique feature of being designed to connect to Italian tax rules: it is Cryptobooks.
The application allows users to connect 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 crypto assets, such as one on capital gains, shares, commissions and others, to be able to handle 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 the Finance Act 2023, compared to the previous total absence of positive tax law regulations, we now have a set of regulations which if nothing else lays down a set of principles for tax.
With regard to this new regulation, how does CryptoBooks help the cryptocurrency holder to be more “compliant” with the new tax regulations?
- CryptoBooks has already incorporated the developments in cryptocurrency taxation introduced by the latest regulations to be able to provide its users with reports that are more in line 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 last operational aspects, we will issue new reports that will further help taxpayers to consciously orient themselves on the regularization of previous 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?
- From 2023 onwards, 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 to fill these forms. It is useful to point out that the reports provided contain all the information to find the best declaration strategy together with your accountant and enter the correct figures into the framework for your return.
Q: Cryptocurrency traders often find themselves operating on multiple platforms. If you have many transactions, how do you report them correctly to know exactly what your taxable income is? How can Cryptobooks facilitate this type of reporting?
- What is requested by our customer is to connect their crypto platforms and enter the public addresses of their wallets so that all cryptocurrency transactions are automatically downloaded by our software; at that time CryptoBooks provides all the tax reports necessary for proper reporting. Cryptocurrency tax reporting is very complex, consider the variety of cryptocurrency transactions such as: staking, lending, borrowing, trading or simple NFT ownership, it is necessary to apply accounting principles for each of these types of transactions. Our peculiarity is that we have made this complicity affordable for everyone.
Q: If a user has held cryptocurrencies but has never previously declared their crypto assets, what are they at risk? And how can he or she become compatible?
- Failure to declare entails penalties which in the most serious cases can reach 30% of what is not declared: a real bloodbath. Fortunately, the current “Amnesty” (so misnamed) allows one to regulate one’s krypton under decidedly favorable conditions. With CryptoBooks we help holders of cryptocurrencies to do the calculations and adjust the last years.
- Q. In conclusion, how can CryptoBooks help the crypto investor adopt the best declaration solution?
- CryptoBooks’ reports, which are the most reliable that any software can process, offer all the essential information needed to establish an effective declarative strategy based on correct calculations – essential elements to pay only the taxes due and not a euros more. Our solution provides a number of features that are unique in the industry and essential for square calculations to be taken into account: we automatically track mismatches between balances and transactions on exchanges, we monitor cryptocurrencies that do not have loading prices and highlight them to the customer, we track transfers between different user sources so as not to miscalculate capital gains.
CryptoBooks offers 4 different subscription plans to meet all needs.
Now, since actions are worth a thousand words, we thought we’d offer Cryptonomist readers the opportunity to purchase crypto books at a 25% discount on purchase of the selected plan.
For this we have activated a promotional code dedicated to those who read The Cryptonomist: only create a CryptoBooks account and then, during the purchase, enter the code CB-CRYPTONOMIST-25 in the required field.
To summarize, 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 possible prospects for audits and lawsuits, in a system, such as the Italian regulations and tax. system, which all too often, amid regulatory loopholes and shortcomings, results in a sort of minefield for users and operators.
Of course, the final word remains with the market and end users, but the product has extremely interesting features.