Taxation and monitoring of digital currencies

Reporting to the OAM

Individuals, non-commercial entities and simple companies holding financial assets abroad that are likely to produce taxable income in Italy must declare such assets in their tax returns. This activity is known as ‘fiscal monitoring’ and the obligation to declare it expires with the completion of the RW panel of the relevant tax return. As a result of this equalization, for the purposes of proper tax monitoring of cryptocurrencies, as of last 16 May, the exercise on the territory of the Italian Republic of services relating to the use of virtual currencies and digital wallet services, is reserved to persons who are registered in the special section of the Register of Operators held by the Organismo degli agenti e dei mediatori creditizi, better known as OAM (Organismo competente in an exclusive and autonomous manner for the management of the Lists of Agents in Financial Activity and Credit Brokers).

Providers of virtual currency and digital wallet services, who intend to carry out their activities also online and on Italian territory, must be enrolled in the special section of the register and will be required to send a communication to the Ministry of Economy and Finance indicating their operations on Italian territory.
This communication constitutes an essential condition for the exercise of the activity by the aforementioned providers.

Registration in the register kept by the OAM is subject to the fulfilment of the following requirements, as far as natural persons are concerned

• Italian citizenship or citizenship of a European Union State or of a different State and domicile in the territory of the Republic;

While with reference to subjects other than natural persons:

• Legal and administrative headquarters or, for EU subjects, permanent establishment in the territory of the Republic.

It should be emphasised that the abusive exercise of the activity is punished with an administrative sanction, issued by the Ministry of Economy and Finance, which may vary from 2,065 euro to 10,329 euro. Finally, the Body may order the cancellation from the special section in the following cases

• loss of one of the requirements for exercising the activity
• repeated breach of the obligation set out in paragraph 3;
• inactivity protracted for more than one year, except for proven reasons;
• cessation of the activity.

With reference to the providers of services relating to the use of virtual currency and digital wallets, who are already carrying on their activity on the date of commencement of the special section of the register, they must make the communication within sixty days of the aforesaid date.
The communication shall be made exclusively in telematic mode, using the service available in the dedicated private area of the OAM portal. In the event of failure to comply with the aforementioned deadline, the communication obligation is deemed not to have been fulfilled and any exercise of the activity by the aforementioned providers is considered abusive.

The communication for natural persons must contain the following information

1 – the surname and first name;
2 – the place and date of birth;
3 – nationality;
4 – the tax code, if assigned
5 – the details of the identification document;
6 – the registered residence as well as the domicile, if different from the residence;
7 – a certified e-mail address for communications between the provider and the OAM;
8 – an indication of the type of activity carried out as a provider of services related to the use of virtual currency and/or as a provider of digital wallet services
9 – the indication of the type of service provided among those listed in Annex 2 to this Decree, which constitutes an integral part of it;
10 – the manner in which the service is carried out, with an indication of the number and address of the physical points of operation, including any automatic teller machines (ATM), and/or online operation with an indication of the web address through which the service is carried out.

For entities other than natural persons, the communication must contain the following data

1 – the company name
2 – the legal nature of the subject
3 – the tax code/VAT number, where assigned;
4 – the registered office and, if different from the registered office, the administrative office;
5 – for entities with registered office in another Member State of the European Union, the location of the permanent establishment in the territory of the Republic
6 – the surname, first name, place and date of birth, tax code, if assigned, and details of the identification document of the legal representative
7 – a certified electronic mail address for communications between the provider and the OAM;
8 – an indication of the type of activity carried out as a provider of services related to the use of virtual currency and/or as a provider of digital wallet services
9 – the indication of the type of service provided among those listed in Annex 2 to this Decree, which constitutes an integral part of it;
10 – the manner in which the service is carried out, with an indication of the number and address of the physical points of operation, including any automatic teller machines (ATM), and/or online operation with an indication of the web address through which the service is carried out.

The communication must also be accompanied by a copy of the identification document of the person making the request and, in the case of a person other than a natural person, of the legal representative, as well as an updated Chamber of Commerce certificate. If there is a need to make any changes to the declared data, the change in the same data must be communicated within 15 days, following the same telematic procedures.

The OAM, having verified the regularity and completeness of the communication and the attached documentation within 15 days of receipt, shall order or deny registration in the special section of the register. The 15-day deadline may be suspended only once, for a period not exceeding 10 days. If the OAM considers the communication to be incomplete, or if it deems it necessary to supplement the documentation accompanying the communication, it shall promptly notify the interested party by pec to provide the requested integrations within 10 days of receipt of the aforesaid notice. Once this deadline has passed without the interested party having done so, the communication shall be deemed not to have been received, and the OAM shall deny the registration in the special section of the register, giving timely and reasoned notice thereof to the interested party.

However, the non-registration shall not affect the right of the interested party to make a new subsequent communication for the purpose of registration in the special section of the register.
Finally, the OAM will transmit to the Ministry of Economy and Finance a semi-annual report containing aggregate data on the number of service providers and the use of virtual currency and digital wallet services that have made the communication for the purpose of registration in the special section of the register.