The Italian Crypto Cost Step-Up: When It Is Worth It

Italy periodically offers a way out of an unrealised gain: pay a substitute tax on the current value of your crypto and reset the cost basis to that value. Whether it is a good deal is arithmetic, not opinion, and the arithmetic changed when the headline rate did.

What the option is

You can elect to pay a substitute tax on the value of your crypto assets in order to revalue the cost basis, which is useful before disposing at the ordinary rate. Our Italy guide notes the step-up rate as approximately 18% and flags that you should verify the rate currently in force, which is the right caution: this option has been reintroduced with different terms and deadlines more than once.

Verify the current rate, the valuation date and the election deadline with the Agenzia delle Entrate or a commercialista before doing anything. On this topic more than most, last year's article is actively misleading.

Why the decision got sharper

The ordinary substitute tax on gains is 26% for gains realised in 2025, declared in 2026, and 33% for gains realised from 1 January 2026, declared in 2027, with a reduced 26% rate for MiCAR-compliant euro denominated stablecoins.

The step-up is only attractive relative to the rate you avoid. A step-up costing around 18% against a 26% ordinary rate is one calculation; the same step-up against 33% is a materially better one. That rate move is the reason the question is being asked again.

The comparison

Two numbers decide it.

Without the step-up: the ordinary rate applied to your gain, meaning disposal proceeds less your original cost.

With the step-up: the step-up rate applied to the whole current value, plus the ordinary rate applied only to any gain arising after the revaluation.

Note carefully what each is charged on. The ordinary tax is charged on the gain. The step-up is charged on the value. That is why the decision turns on how large your unrealised gain is as a proportion of what you hold.

• Large unrealised gain, low original cost. The gain is close to the whole value, so a lower rate on the value beats a higher rate on almost the same amount. This is where the step-up works.
• Small unrealised gain. You would be paying the step-up rate on value that is mostly your own original cost, in order to shelter a small gain. This is where it fails, and it fails badly.
• An unrealised loss. You would be paying tax to reset a basis downward. Do not.

What the step-up does not fix

• The 0.2% annual charge. It applies to the value of crypto held at 31 December or the disposal date regardless, and revaluing the cost basis does not touch it.
• Quadro RW. Holdings are still declared.
• Missing records. A step-up sets a new basis going forward; it does not retroactively evidence what happened before, and you may still need the history for other years.
• The timing risk. You pay now on today's value. If the market falls afterwards, you have paid tax on value you no longer have, and there is no refund for being wrong about the direction.

How to decide

1. Compute your actual unrealised gain, per asset, with real acquisition costs. Most people estimate this badly, and it is the input that dominates the answer.
2. Get the current step-up rate, valuation date and deadline from the Agenzia delle Entrate or a commercialista.
3. Run both numbers on the assumption you dispose, and then on the assumption you do not dispose for several years.
4. Ask whether you actually intend to sell. A step-up on a position you will hold for a decade is a real cost today against a hypothetical benefit later.
5. Decide before the deadline, since it is an election with a date rather than something available whenever you are ready.

Our Italian crypto tax guide covers the framework, and the calculator computes the unrealised gain the decision depends on.

General information, not tax advice. Rules change and depend on your circumstances. Confirm the current position with the relevant tax authority or a qualified tax professional.