Offsetting Crypto Losses in Italy: How Compensation Works

After a volatile year the useful question is not whether losses are deductible in Italy. It is whether you did the one thing that makes them usable, and most people did not, because it happens in a year when nothing appears to be owed.

The rule that decides everything

A loss is only usable if it is declared. Quadro RT carries capital gains and losses on crypto assets, and a loss you leave off the return in the year it arose is not sitting somewhere waiting for you.

This is counterintuitive precisely because a losing year feels like a year with nothing to file. It is the opposite: a losing year is the year in which filing matters most, because you are creating an asset you will use later.

Note also that Quadro RW is unaffected by any of this. The 0.2% annual charge applies to the value of crypto assets held, at 31 December or the disposal date, whether the year was good or bad.

Which gains a loss can absorb

Crypto gains are subject to a flat substitute tax, separate from progressive IRPEF. Because that regime is separate, do not assume a crypto loss can reach across into unrelated income. Confirm with the Agenzia delle Entrate or a commercialista which categories your losses can offset and over what period they carry forward, since the framework has been revised more than once.

Realising a loss requires a disposal

A position that has fallen has not produced a loss. A taxable event generally arises when you convert to fiat or spend crypto. Swaps between crypto assets with the same characteristics and functions are not normally taxable per Agenzia delle Entrate guidance, though the point is nuanced and worth checking on your facts.

The practical consequence is that holding through the decline produces nothing usable. The loss has to be realised in the calendar year for it to belong to that year.

Why the rate change makes timing sharper

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

A loss is worth whatever rate it shelters. A loss carried into a period taxed at the higher rate shelters gains taxed at that rate, so the value of an unused loss is not fixed. That argues for deliberate rather than accidental timing, and for taking advice before acting on it, since the carry forward rules are what determine whether the choice is even available.

Note also that the 2,000 euro exemption threshold was abolished from 2025, so every euro of gain is taxable, and the threshold still applies for earlier years. That removes a cushion that previously absorbed small gains without any loss being needed.

What to do

1. Compute the year honestly, gains and losses both. People who assume a bad year has nothing to report generally have not computed it.
2. Declare losses in Quadro RT in the year they arise. This is the step that makes them exist.
3. Complete Quadro RW regardless, for holdings and the 0.2% charge.
4. Check the carry forward period and the offsetting scope with a commercialista before planning around them.
5. Keep the acquisition records that evidence the loss. An undocumented loss is not a loss you can defend.

Our Italian crypto tax guide covers the framework, and crypto tax reports produce the RT and RW figures.

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.