Taxes on Crypto in Italy 2026: Complete Guide to Bitcoin, Ethereum and DeFi

If you own bitcoin, ethereum or have interacted with DeFi protocols over the past year, you're probably wondering how to handle things with the Italian tax authorities. The short answer is: you need to declare everything. The long answer is what you'll find in this article, updated to the regulations in effect in 2026 and the latest circulars from the Revenue Agency.

Italy has made significant strides toward clear cryptocurrency regulation, especially following the changes introduced by the 2023 Budget Law and subsequent regulatory updates. After years of uncertainty, there is now a fairly defined fiscal framework — though not without gray areas — that every investor, trader, or Web3 enthusiast needs to understand to avoid issues with the tax authorities.

Whether you're a long-term HODLer with some bitcoin purchased years ago, an active user of DeFi platforms like Aave or Uniswap, or simply someone who received some tokens as staking rewards, this guide will provide you with practical tools to understand what to declare, when, and how.

The 2026 Regulatory Framework: Rates, Thresholds and Updates

Italy's tax regime on cryptocurrencies has stabilized around a model that treats digital assets as financial instruments. This means that capital gains realized from buying and selling bitcoin, ethereum and any other cryptocurrency are subject to a 26% substitute tax, applicable to capital gains exceeding the annual threshold of 2,000 euros.

Attention: this threshold is calculated on the net annual balance of capital gains and losses. If you made 5,000 euros selling bitcoin but lost 3,500 euros on some altcoins, your taxable base will be 1,500 euros — and in this case you would fall below the threshold, paying nothing. It's a crucial detail that many overlook.

The main categories of crypto income in 2026:

• Trading capital gains: positive difference between selling price and purchase price, taxed at 26% above €2,000
• Staking and yield farming income: considered capital income, taxed at 26% on the entire amount received
• Mining income: classified as miscellaneous income or business income, depending on volume and operational structure
• Airdrops and free tokens: taxed at market value at the time of receipt
• NFTs: handled case by case, with the same logic as capital gains if sold at a price higher than purchase

In 2026, automatic reporting obligations also came into effect from exchanges registered in Italy or operating in the European market, in line with the DAC8 directive adopted by the European Union. This means that Coinbase, Kraken, Binance and other operators automatically communicate transaction data of their Italian users to the Revenue Agency. It's no longer possible to hope to go unnoticed.

How to Declare Bitcoin and Ethereum: The 2026 Income Model

Declaration of cryptocurrencies occurs through the Individual Income Tax Form, in the section dedicated to miscellaneous income (Schedule RT) and tax monitoring (Schedule RW). Let's see how it works concretely.

Schedule RW: Asset Monitoring

Schedule RW is used to declare the holding of cryptocurrencies as of December 31 of each tax year. The obligation applies if the total value of digital assets exceeded 15,000 euros even just once during the year. It's not a wealth tax, but a transparency requirement.

To complete Schedule RW you must indicate:

1. The type of asset (bitcoin, ethereum, etc.)
2. The equivalent value in euros as of December 31
3. The country where it's held (foreign exchange or personal wallet)
4. The method of holding (direct or through an intermediary)

Schedule RT: Capital Gains

This is where you actually pay. In Schedule RT you declare:

• The total capital gains realized in the year
• The total capital losses
• The 26% substitute tax owed on the net balance exceeding €2,000

A practical example: You purchased 0.5 bitcoin in January 2025 for €20,000. In March 2026 you sold them for €35,000. Capital gain: €15,000. Tax owed: (€15,000 - €2,000) × 26% = €3,380. This amount must be entered in Schedule RT and paid by the ordinary deadlines.

Uncompensated losses can be carried forward over the next four years, offsetting future capital gains. Always keep track of them.

DeFi, Staking and Yield Farming: The Gray Areas of Crypto Taxation

The most complex part of crypto taxation in Italy concerns the world of DeFi — decentralized finance — where transactions never pass through a traditional intermediary and traceability is entirely up to the user.

Staking

If you staked ETH on Lido or validated transactions on a proof-of-stake network, the tokens you receive as rewards are considered capital income at the moment you receive them. The market value at the time of receipt constitutes the taxable base, taxed at 26%.

Yield Farming and Liquidity Mining

The situation here is even more complex. When you provide liquidity on protocols like Uniswap or Curve, you receive LP tokens (Liquidity Provider) that represent your share in the pool. According to the prevailing interpretation of the Revenue Agency:

• Depositing crypto in a pool is not a taxable event in itself
• Rewards received in native tokens (e.g., CRV, UNI) are taxable at the time of receipt
• Withdrawing liquidity can generate capital gains if the value has increased since entry

Swaps Between Cryptocurrencies

One of the most controversial points: direct exchange between two cryptocurrencies (for example, switching from ETH to USDC) is considered a taxable event in Italy. Fiscally, each swap is equivalent to a sale followed by a purchase. This means that every time you swap on a DEX, you could generate a capital gain or loss to declare.

Practical advice: use portfolio tracking software like Koinly, CoinTracking, or Accointing to automatically import transactions from the blockchain and automatically calculate capital gains/losses. In 2026, these tools support most DeFi protocols and generate reports compatible with the Italian Income Tax Form.

Voluntary Disclosure and Penalties: What You Risk If You Don't Declare

Many cryptocurrency investors have accumulated gains over the past years without ever declaring them, convinced that the tax authorities would have no way to trace their transactions. With the entry into force of DAC8 and automatic information exchange protocols between EU countries, this strategy is today extremely risky.

Penalties provided for non-declaration:

• Non-compilation of Schedule RW: penalty of 3% to 15% of the undeclared value (doubled for assets in blacklisted countries)
• Non-declaration of capital gains: penalty of 90% to 180% of the evaded tax, plus interest
• Cases of tax fraud: in the presence of deliberate concealment, criminal penalties apply

The good news is that there is a voluntary disclosure mechanism, which allows you to spontaneously regularize your tax positions before an audit arrives. In 2026, long-term disclosure (over two years) provides reduced penalties of 1.5% for formal violations and more contained penalties on taxes, with significant savings compared to waiting for an audit notice.

If you have previous years that haven't been declared — especially the bull market of 2024-2025 — it is strongly recommended to consult a tax professional specializing in digital taxation to evaluate a voluntary disclosure as soon as possible.

Frequently Asked Questions

Q: Do I have to pay taxes if I've never converted crypto into euros? A: It depends. If you've made swaps between different cryptocurrencies (even on DEXs), you may have generated taxable capital gains even without ever touching euros. Converting ETH to USDC, for example, is fiscally equivalent to a sale. If instead you simply bought and held without ever selling or swapping, you haven't realized any capital gains and don't have to pay taxes — but you may still have reporting obligations in Schedule RW if the value exceeds €15,000.

Q: How do I calculate the purchase cost if I bought bitcoin in multiple tranches at different prices? A: The Italian tax authority applies the LIFO (Last In, First Out) method as the default criterion, but you can also use the weighted average cost method. It's essential to maintain a precise record of every purchase with date, quantity, and price paid. Portfolio tracking software automates this calculation reliably.

Q: Can losses on crypto offset gains on stocks or other financial instruments? A: No. Capital losses from cryptocurrencies can only be offset against capital gains from cryptocurrencies, not against gains from stocks, ETFs, or other instruments. This is an important limitation compared to other financial assets, which makes managing the tax treatment of crypto portfolios even more specific.

Q: If I use a foreign exchange not registered in Italy, don't I have to declare? A: Absolutely wrong. The reporting obligation falls on the Italian taxpayer, regardless of where the asset is held. With DAC8 and automatic information exchange agreements, Italian tax authorities receive data from exchanges around the world. Not declaring is not a safe choice: it's a concrete risk of audit and heavy penalties.

Q: Are gains from NFTs taxed the same way as cryptocurrencies? A: Essentially yes, with some nuances. If you buy an NFT and resell it at a higher price, the capital gain is taxed at 26% above the €2,000 threshold. If you create and sell NFTs as a recurring activity, the income could be classified as artistic or business activity income, with different tax treatment. The line between occasional investment and systematic activity is one of the most delicate points to evaluate with a professional.

Conclusion

The taxation of cryptocurrencies in Italy in 2026 is more defined than ever, but still requires attention, organization and — in many cases — the support of a specialized tax professional. The 26% rate on capital gains above €2,000, the monitoring obligations in Schedule RW, and the taxation of DeFi income are elements that every investor must reckon with.

The most important advice is this: start keeping a detailed record of all your transactions from day one. Use a reliable portfolio tracking tool, keep proof of purchases, and don't wait until the last minute to do the calculations. If you have previous positions that haven't been declared, seriously consider voluntary disclosure before the tax authority comes knocking.

The crypto world is still evolving rapidly, and the tax regulations along with it. Stay informed, consult authoritative sources, and never rely on generic advice found online for decisions that impact your personal tax situation.