Guide to Navigating and Understanding Your Tax Report (Italy)

Introduction

This guide helps you understand how your tax report is structured and how to interpret the data. It explains key settings, transaction classifications, and how different activities are treated from a tax perspective in Italy.

Section 1: Settings

Before generating your tax report, you can configure several settings that directly impact the calculation.

Accounting Method

CoinTracking provides multiple accounting methods:

• FIFO (First-In-First-Out): The first assets acquired are treated as sold first

• LIFO (Last-In-First-Out): The most recently acquired assets are treated as sold first

• HIFO (Highest-In-First-Out): The assets with the highest acquisition cost are sold first

Each method has different tax implications.
LIFO is typically used in Italy, but the appropriate choice depends on your individual situation and local regulations.

Automatic Depot Separation

• Automatically assigns deposits and withdrawals to specific exchanges or wallets

• Without this feature: all wallets/exchanges are treated as one combined portfolio

• With this feature enabled: each wallet/exchange is treated separately

This allows for more precise tracking and evaluation of transactions.

Tax Treatment of Liquidity Pool / Mining Transactions

• Transactions such as “Provide Liquidity” and “Return LP Tokens” can be treated as disposals

• This means gains/losses will be calculated and included in the tax report

Redditi Quadro RW Report

• Provides an overview of crypto holdings on foreign exchanges

• Includes:

  • Value on January 1

  • Value on December 31

• All values are converted into EUR

E-Money

• Refers to stablecoins pegged to fiat currencies

• Classified as a separate asset class

• Not treated as standard crypto in crypto-to-crypto tax-free scenarios

Internal Transfers

• Ensures transfers between your own wallets follow the selected accounting method

• Prevents inconsistencies (e.g. fallback to FIFO when using LIFO)

• Maintains consistent cost basis tracking

Group by Day

• Groups transactions by day instead of exact timestamps

• Useful when:

  • Timezone data is missing or inconsistent

  • Trades appear out of order

FIAT Warnings

• Warns when transactions involve FIAT currencies not configured in the account

Foreign FIAT PnL

• Enabled: Gains/losses from foreign FIAT currencies are included

• Disabled: Only EUR-based gains/losses are considered

Conversion

• All transactions are converted into your FIAT currency (EUR)

• Conversion is based on the value at the time of the transaction

• As this is a bit more complicated, we have a separate FAQ for it: Conversion Method

Section 2: Overview

The tax report organizes all transactions according to Italian tax rules.

Core Tax Principles in Italy

• Crypto gains are subject to 26% Capital Gains Tax

• Crypto-to-crypto and NFT-to-NFT transactions are generally not taxable

• Transactions between different asset types (e.g. crypto ↔ stablecoin) are taxable

• Income is taxed separately (typically 23%–43%)

• A substitute tax system may apply when declaring holdings at the beginning of the year

Report Sections

The report is divided into the following categories:

1. Capital gains/losses from cryptocurrency & NFT trading

2. Other income

3. Non-taxable income

4. Other cryptocurrency and NFT payments

5. Portfolio value

1. Capital Gains/losses from cryptocurrency & NFT trading 

Includes:

• 1.1 Crypto trading gains/losses

• 1.2 NFT trading gains/losses

• 1.3 Derivatives, margin, and futures

Example:

• Buy 1 BTC for €10,000

• Sell for €20,000
   → Gain: €10,000 → Section 1.1. Realized capital gains/losses from cryptocurrency trading

Margin, Derivatives & Futures

Includes:

• Margin gains/losses

• Derivatives/futures gains/losses

• Fees and settlement fees

Example:

• Margin profit: €1,000

• Margin loss: €500
   → Net gain: €500

Reported under Section 1.3

2. Other Income

Income is taxed when:

• You gain control over the asset

• The value can be determined in EUR

Includes:

• Income

• Reward / Bonus

• Staking

• Mining

• Airdrop

• Masternode

• Dividends income

• Lending income

• Interest income

• LP Rewards

• Other income

Example:

• Mining reward worth 0,5 BTC, valued at €20,000 → taxed as income

• Airdrop worth €100 → taxed as income

Reported under Section 2.1

3. Non-Taxable Income

Includes:

• Income (non-taxable)

• Airdrops (non-taxable)

Even though not taxed, these transactions must still be reported for transparency.

4. Other Crypto & NFT Transactions

Reported separately due to different tax treatment:

• Incoming gifts and donations

• Outgoing gifts and donations

• Lost or stolen assets

• Commercial mining

• Minting

5. Portfolio Value

• Value at the start of the year

• Value at the end of the year

Section 3: Transaction List

The transaction list provides a detailed breakdown of all activities.

Taxable Transactions (Important)

Transactions that typically trigger gains:

• Trade

• Spend

• Fees (paid in crypto)

• Remove liquidity

• Provide liquidity

Summary

• The tax report separates transactions into gains, income, and non-taxable categories

• Settings significantly impact results and must be configured correctly

• Italy applies:

  • 26% capital gains tax

  • Income tax on earnings (23–43%)

• Correct classification of transactions is essential for accurate reporting

Disclaimer

This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax laws may change. Please consult a qualified tax advisor for personalized advice.