The Rules and Future Scenarios of Cryptocurrencies, Tax Treatment in Italy
Nov 25, 2019 at 10:34 //
News
The rules and conditions regulate cryptocurrencies including Bitcoin in Italy, to define the correct approach with which to deal with the taxation and accounting of these tokens. The present situation provides the opportunity to reflect on their future.
The increasing popularity of cryptocurrencies raises questions about the tax treatment to which they are subjected. Moreover, new technologies continue their disruptive work in all aspects of our society and it is now impossible for the state body to continue to undergo changes linked to innovation.
The point of no return, and therefore of a necessary awareness, comes when technological innovation pervades the business or rather the economy in all its academic and practical declinations. Considering this area, the subject of this analysis are the blockchain and the bitcoins: let’s examine the legislation on how to treat cryptocurrencies for tax purposes.
Tax Rules on Cryptocurrency
The point of no return that forced the country to face the regulatory problem and define its essential features, was the opening in 2015 of a limited liability company through bitcoin contributions. The cryptocurrency par excellence. In other words, we are faced with the classic article ex art. 2465 of the Italian Civil Code, which concerns contributions in kind and their estimate by a statutory auditor or legal auditing company registered in the appropriate register, at the initial conferral stage.
So we are dealing with a juridical person, endowed with perfect patrimonial autonomy, who links up with different shareholders but with a cryptocurrency share capital.
The Bank of Italy (BoI) in 2015 stated that the purchase, use and payment acceptance of cryptocurrencies must at the moment be considered legal activities. However, attention is drawn to the fact that the activities of issuing cryptocurrency, conversion of legal money into tokens and vice versa and management of the related operational schemes could instead materialize, in national law, the violation of regulatory provisions, punished by penalties, that reserve the exercise of the relative activity only to legitimate subjects.
It therefore leaves a regulatory gap and a very high risk for users, assuming that cryptocurrencies do not have legal tender. Again in 2019 the BoI itself, underlines how the IASB should assess the need for a discipline of crypto-activity, thus assuming an implicit opening to digital assets.
Financial Instruments
In fact, moving the axis of analysis from the political institutional level to the technical accounting one, much has been done to frame the question about the accounting aspects, with all the consequent benefits regarding the evaluation and allocation to the budget.
First of all, let’s start by saying that the interpretation of IAS 8 "Accounting standards, changes in accounting estimates and errors" shows that the company, even when using cryptocurrencies, must use its own judgment to create and develop an accounting standard.
This is obviously a closing rule, which obviously can create problems for the subjects involved. The inclusion of cryptocurrencies in the definition of cash contained in IAS 32 AG3 unanimously seems to be excluded, since these currencies do not provide the intrinsic right to receive a value and the liberating power, and do not perform the traditional functions of the currency due to its very high volatility. The same goes for when it concerns their potential inclusion in the "financial instruments". The choice, not only of interpretation, seems to have fallen on the inventories and intangible assets.
It would be useful to set up a new type of asset for accounting purposes. Digital assets or a new category of cryptocurrencies, providing new categories of rights and obligations involving the aforementioned currencies, at times very different from the traditional and physical ones. As for Italy, the institution of the Ministry of Innovation and the desire to do of the Bank of Italy seem to bode well.
OhNoCryptocurrency via https://ift.tt/2PblI7a @coinidol.com By Coin Idol, @Khareem Sudlow