Italy Wants To Become the First Country to Exempt NFTs from VAT

NFT artists in Italy can potentially save significant money on taxes.

The Italian government has communicated its intention to exclude NFTs from VAT, making them more affordable for artists and collectors. This was announced in a consultation by Agenzia delle Entrate dated June 15, 2023, which also discussed NFT sales by crypto artists in detail.

Credits: Agenzia Delle Entrate

What you need to know

The exemption applies to NFTs that are considered to be works of art or digital collectibles. The ones that are considered to be financial assets, such as those that represent ownership of a cryptocurrency, would not be exempt from VAT.

1. For NFTs that are digital artwork, the sale is not considered a provision of services and is therefore excluded from VAT.
2. The transfer of NFTs by the author (outside the exercise of a commercial business) constitutes “self-employment income” and falls under the individual “royalties” regime.
3. Authors under 35 years old can benefit from a lump-sum deduction of 40% of the compensation, while…