How to Report NFT Profit in Italy: Complete Tax Guide for 2024

Understanding NFT Taxation in Italy

Non-Fungible Tokens (NFTs) have exploded in popularity, but many Italian investors overlook their tax implications. In Italy, NFT profits are treated as capital gains and subject to taxation under the Testo Unico delle Imposte sui Redditi (TUIR). Whether you’re an artist, collector, or trader, any profit from selling NFTs must be reported to the Agenzia delle Entrate (Revenue Agency). Failure to comply can result in penalties of 120-240% of unpaid taxes plus interest. This guide breaks down Italy’s NFT tax framework in simple terms.

Step-by-Step Guide to Reporting NFT Profits

1. Determine Tax Residency: Italian residents pay taxes on worldwide NFT profits. Non-residents only declare income from Italian sources.
2. Calculate Your Capital Gain: Subtract purchase costs (NFT price + gas fees + platform commissions) from the sale price. Example: Buy NFT for €1,000 (€50 fees), sell for €3,000 → taxable gain = €1,950.
3. Apply the 26% Tax Rate: Italy taxes NFT capital gains at a flat 26% rate. Using our example: €1,950 × 0.26 = €507 owed.
4. File Through Modello Redditi PF: Report gains in Section RT of the personal income tax form (Box 8 for capital assets). Deadline: June 30th following the tax year.
5. Pay Taxes via F24 Form: Settle dues via bank transfer or PagoPA using tax code 2584 (capital gains from financial assets).

Required Documentation for Compliance

• Blockchain transaction records (wallet addresses, TX IDs)
• Purchase/sale invoices from NFT platforms
• Proof of acquisition costs (minting fees, gas costs)
• Exchange rate logs if transactions involved cryptocurrency
• Documentation for deductible expenses (marketing, professional services)

Critical Mistakes to Avoid

• Ignoring small transactions: All sales must be reported regardless of profit amount
• Mixing personal and NFT wallets: Maintain separate wallets for clearer auditing
• Forgetting foreign platforms: Income from OpenSea/Rarible must be declared
• Overlooking airdrops/staking rewards: These count as miscellaneous income at marginal rates
• Missing deadlines: Late filings trigger automatic penalties starting at €250

NFT Tax FAQ Section

Are NFT losses deductible in Italy?

Yes. Capital losses can offset gains from NFTs or other financial assets in the same tax year. Unused losses carry forward for up to 4 years.

Do I pay taxes if I trade NFTs for cryptocurrency?

Absolutely. Crypto-to-NFT trades are considered taxable events. You must calculate gains based on the euro value at transaction time.

How are artist royalties taxed?

Secondary sales royalties qualify as self-employment income (not capital gains). Report in Section RL of Modello Redditi PF and pay IRPEF at progressive rates (23%-43%) plus regional taxes.

Is there a tax-free threshold?

No. Unlike some EU countries, Italy has no minimum exemption for NFT profits. Even €1 of gain requires reporting.

What if I hold NFTs long-term?

Italy has no reduced rates for long-term holdings. The 26% capital gains tax applies regardless of ownership duration.

Can the tax agency track my NFT activity?

Yes. Under DAC8 regulations, Italian platforms must report user data. For non-EU exchanges, the Revenue Agency uses blockchain analytics tools to identify tax evaders.

Pro Tip: Consult a commercialista (Italian tax advisor) specializing in crypto assets. Tax rules evolve rapidly – recent proposals suggest treating NFTs as collectibles (taxed at higher rates) if held for speculation. Maintain meticulous records using crypto tax software like Koinly or CryptoTax, and always convert transaction values to euros using ECB exchange rates.