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Malta: cryptocurrencies between paradise and tax hell

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El Salvador and Belarus are the most permissive countries. Italy, France and Finland are the strictest. This is the result of a survey compiled by Sape Cons Ltd, a law firm based in London, and formed by two Italian professionals, Oreste Maria Petrillo and Fabio Santoro.

The softest countries? El Salvador and Belarus. The strictest? Italy, France and Finland. A survey compiled by Sape Cons Ltd, a law firm based in London, and formed by two Italian professionals, Oreste Maria Petrillo and Fabio Santoro, lawyers who are experts in the often unknown world of cryptocurrencies: "Those who invest almost never know the laws on the subject, risking violating rules that can then lead to serious consequences. Few people know, for example, that, in our country, several pronouncements of the Inland Revenue Agency and various court rulings have, in fact, subjected revenues from virtual currency to the general tax rules contained in the Consolidated Income Tax Act (TUIR) and in the Decree on the establishment and regulation of VAT," explains Petrillo.

This means that capital gains are taxed separately, while for IRES, IRAP and IRPEF the tax brackets provided for by law are applied: "In particular, revenues realized on the sale of foreign currency coming from deposits and current accounts are subject to Personal Income Tax provided that, in the tax period in which the sale takes place, the balance of these accounts exceeds Euro 51,645.69 for at least seven consecutive working days. Not knowing the rules is dangerous because you risk evading taxes without even knowing it", says Santoro.

Hence the idea to study in depth the laws of almost 50 countries and to start an online course (Cripto Ca$h) with consulting support, to update operators and investors of the crypto world, professionals and not, on the intricate subject: "This resulted in a ranking of the nations that are more, let's say, permissive and those that have instead tightened their ranks from a fiscal point of view," explains Petrillo- In first place, there is undoubtedly El Salvador, where Bitcoin, which has a primary role among cryptocurrencies, is assumed to the rank of legal tender. With Bitcoins, one can thus pay taxes, make purchases of any kind and fulfill any kind of obligation (administrative and private). Here, the capital gain tax, if certain conditions are met, is 10%."

Belarus has gone further, having adopted, a rare case, specific legislation on crypto-assets. A Decree of the Belarusian President, therefore a primary regulation, has thus legalized virtual currency: "The Decree has sanctioned the creation of a territorial perimeter within the State whose purpose is to incentivize and cultivate digital technology," Santoro says. "This zone, in every way similar to America's Silicon Valley, enjoys, for companies and individuals who reside there permanently, preferential tax treatment. Companies pay only 1% of income as a residence tax."

On the other hand, the Finnish legislation is quite different, where crypto-assets are considered property and therefore subject, when sold, to the tax rules relative to capital gain. This means that, as for all capital gains, a dry rate of 30% (up to 30,000 euros) or 34% (over 30,000 euros) is applied. "Even different discussions of what happens in France," explained the law firm Sape Cons Ltd. "Here, on the basis of a commercial court ruling in 2020, cryptocurrencies are generally considered a digital representation of value whose taxation is based differently on the distinction that passes between business and non-business. Income tax, the tax on income, is staggered and can be as high as 45%, while capital gains tax is dry, 30%. Finally, since January 1 of this year, the Corporation tax has been set at 25%".

 

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TEXT TRANSLATED FROM THE ORIGINAL ARTICLE IN ENGLISH PUBLISHED BY ItaliaOggi

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