Entries by Antonio Ferrara

Low-Code and No-Code: The Software Revolution

The world of software development is undergoing an unprecedented transformation thanks to the advent of Low-Code and No-Code platforms, along with the integration of generative artificial intelligence tools such as GitHub Copilot, ChatGPT and Gemini. These innovative tools are breaking down traditional programming barriers, making it possible for those without advanced technical skills to create applications.

A New Way of Creating Software

Imagine being able to develop an application by simply dragging and dropping visual components, without the need to write complex lines of code. Low-Code and No-Code platforms offer exactly this opportunity. Low-Code solutions require minimal programming knowledge, allowing developers to speed up the process through visual templates and tools. No-Code platforms, on the other hand, completely eliminate the need for coding, allowing even the uninitiated to create functional applications.

In parallel, generative artificial intelligence tools such as GitHub Copilot and ChatGPT are revolutionising the way code is written. Based on advanced AI models, these assistants offer real-time suggestions and can even generate entire portions of code or answer technical questions, helping developers to write code faster and with fewer errors.

In addition, Gemini, a multi-modal artificial intelligence project, promises to bring further innovation to the field of software development by integrating advanced natural language generation and understanding capabilities.

This democratisation of software development is broadening the horizons of innovation. Now, professionals from various fields can turn their ideas into practical applications, directly contributing to the digitisation of business processes without going through long traditional development cycles.

Why This Revolution Is Happening Now

The growing demand for fast, customised digital solutions has put pressure on traditional development teams. In an era where time-to-market is crucial, companies are looking for more efficient ways to develop software that meets the evolving needs of the market. Low-Code and No-Code platforms emerge as the answer to this need, offering tools that accelerate development and facilitate adaptation to change.

According to industry forecasts, by 2024 a significant share of application development will be done using Low-Code and No-Code platforms. The adoption of generative artificial intelligence tools such as GitHub Copilot and ChatGPT is growing exponentially. These figures underline the growing importance of these technologies in maintaining competitiveness in today’s digital landscape. Companies that adopt these solutions can respond more quickly to market opportunities by offering innovative products and services.

Benefits Beyond Efficiency

In addition to speed of development, these platforms promote innovation within the company. Employees who deeply understand the needs of the business can actively participate in the creation of digital solutions, without having to wait for the IT department to intervene. This approach fosters greater cross-functional collaboration and accelerates the realisation of innovative ideas.

The integration of artificial intelligence tools, such as Copilot, ChatGPT and Gemini, helps developers write more efficient and secure code. AI can suggest best practices, help identify potential vulnerabilities and propose optimal solutions based on a vast database of existing code.

In addition, Low-Code, No-Code platforms and AI tools can help reduce development costs as they decrease the need for highly specialised resources. This allows companies to allocate budgets and resources to other strategic areas. The accessibility of these tools also enables small and medium-sized companies to compete with larger organisations, further democratising the technology landscape.

Challenges to be faced

Despite the many advantages, the adoption of these platforms presents some challenges. The security of applications developed without rigorous technical control can be a source of concern. It is essential to ensure that applications comply with security standards and regulations. Lack of technical expertise could lead to underestimating critical aspects such as data protection and application resilience.

Artificial intelligence tools such as Copilot and ChatGPT are also not without limitations. Although they can speed up development, there is a risk that the suggested code contains vulnerabilities, is redundant or is not optimised for the specific application context. It is crucial that developers carefully review AI suggestions, ensuring that they are appropriate and safe.

The future introduction of technologies such as Google Gemini will bring additional considerations, especially in terms of integration and compatibility with existing tools.

Another risk is the possible creation of data silos, especially if new applications are not properly integrated with existing systems. This can lead to inefficiencies and duplication of information, further complicating the management of corporate data.

To address these challenges, it is crucial to establish appropriate guidelines and governance. Companies must ensure that the use of low-code, no-code and AI tools is aligned with IT strategies and that there is effective coordination between departments. Implementation of internal policies and staff training can help mitigate the associated risks.

The Future of Development is Accessible and Intelligent

The rise of low-code, no-code platforms and generative artificial intelligence tools represents more than just a technology trend; it is a real cultural shift. We are moving from an era in which software development was reserved for a few experts, to a future in which creativity and innovation are within the reach of many.

This movement democratises technology, allowing people with different skills to contribute to the development of digital solutions. In a way, we are witnessing a return to the origins of computing, when the first personal computers made technology accessible to everyone. Now, with Low-Code, No-Code and generative AI, we are making the creation of that technology accessible as well.

The implications of this transformation are profound. Companies can become more agile and responsive, while employees gain new skills and opportunities for professional growth. It also paves the way for more inclusive innovation, where different perspectives can contribute to solving complex problems.

Reflection

The Low-Code and No-Code movement, together with the integration of artificial intelligence tools such as GitHub Copilot, ChatGPT and the future Google Gemini, is redefining the software development landscape, opening up new possibilities for companies and individuals. While it is important not to underestimate the challenges associated with these technologies, the potential benefits are enormous. Organisations that take advantage of these opportunities will be better positioned to innovate and thrive in an increasingly digital world.

Adopting these platforms and tools means embracing a more agile and collaborative approach, where ideas can quickly turn into concrete solutions. It is a step towards a future where technology is not only used by everyone, but also created by everyone. Companies that invest in this direction could gain a significant competitive advantage by successfully adapting to the challenges and opportunities of digital transformation.

The era of accessible and intelligent software development has just begun, and the possibilities that lie ahead are exciting. With the combination of Low-Code, No-Code and generative artificial intelligence, the power to innovate is in the hands of more and more people, ready to shape the future of technology.

Artificial Intelligence Rewrites the Rules in Software Development

How advanced algorithms are transforming the software development landscape and redefining the future of the technology industry.

In today’s increasingly digital world, where technology drives progress in every sector, Artificial Intelligence is emerging as the main catalyst for an unprecedented revolution in the software development industry. From machine learning algorithms to advanced recommendation systems, AI is rewriting the rules of the game, leading to a radical change in the way software is designed, developed and managed.

What makes AI technologies so transformative in the context of software development?

The most striking aspect is the ability of AI to automate once tedious and human resource intensive processes. Through machine learning and advanced data analysis, AI algorithms can perform tasks such as automated testing, code generation and performance optimisation, freeing developers from repetitive tasks and allowing them to focus on high value-added activities.

But AI does not stop at simple automation. With its ability to analyse large amounts of data in real time, it can improve software quality by proactively identifying and correcting errors. This means more reliable and robust software, resulting in a better user experience and increased customer confidence.

But there is more. Artificial Intelligence is also changing the way developers make decisions. Through predictive analytics and continuous learning, AI can provide data-driven recommendations for design choices, deployment strategies and product improvements. This not only speeds up the decision-making process, but also makes it more accurate and targeted.

However, with great power also comes great responsibility. The widespread adoption of Artificial Intelligence in the software development process raises a number of challenges and ethical issues. Data security, the risk of algorithmic bias and the impact on user privacy are just some of the issues that require special attention from the technology community.

Despite these challenges, the future of the software development industry looks brighter than ever, thanks to the impetus of the Artificial Intelligence revolution. With its ability to optimise processes, improve software quality and inform smarter decisions, AI promises to radically redefine the technology landscape, paving the way for new frontiers of innovation and growth.

In conclusion, as we prepare to embrace an AI-driven future, it is crucial to address the challenges and responsibilities that accompany this transformation. Only through a responsible and future-oriented approach can we fully exploit the revolutionary potential of Artificial Intelligence in software development and beyond.

SaaS: Digital Transformation in Software

The software industry has witnessed an unprecedented revolution thanks to the innovation of the SaaS model, or Software as a Service. This evolution has radically redefined traditional ways of distributing and managing software, opening the door to a digital world characterised by flexibility, accessibility and innovation. By taking a closer look at the history and developments of SaaS, it is possible to fully understand the extent of this transformation and anticipate its future impact.

From roots to market explosion:

In the early days of the Internet, in the 1990s, the embryonic concept of SaaS was beginning to emerge among the many emerging technological innovations. In those years, software was mainly distributed via physical media such as disks and required complex and expensive installations. However, even then, a futuristic vision could be glimpsed in which software would be delivered as a service accessible from anywhere via a simple Internet connection.

With the advent of the new millennium, SaaS made its triumphant entry onto the digital scene, radically transforming the landscape of the software industry. Companies began offering SaaS services in key areas such as CRM (Customer Relationship Management), HR (Human Resources), and ERP (Enterprise Resource Planning), introducing a new paradigm in software interaction. The promise of flexibility, accessibility and scalability quickly caught the attention of enterprises of all sizes, leading to a rapid adoption and spread of the SaaS model.

However, SaaS has not stopped where it started, but has evolved steadily over the years. This development has been fuelled by the advancement of cloud technologies and the growing demand for customisation and integration. Businesses have begun to demand SaaS solutions that can adapt to their specific needs and integrate effortlessly with existing systems. This growing demand has given rise to an explosion of the SaaS market, with vertical solutions appearing in all sectors, from education to healthcare, from finance to marketing.

A bright future of innovation and adaptation

The future of SaaS looks bright, with a wide range of unexplored possibilities. As technological innovation continues to evolve and business adoption becomes more widespread, SaaS will continue to redefine the way we conceive and use software. Its flexibility, accessibility and ability to adapt to changing market needs make it a driver of digital innovation and a catalyst for business progress.

SaaS represents more than just a software distribution model; it is a transformative force that is shaping the future of the software industry and redefining the rules of the game. It is an exciting journey towards a new digital paradigm, and the companies that fully embrace this transformation will be at the forefront of shaping the future of the digital economy.

Agile and Lean Principles: Driving Business Transformation Beyond Software Limits

In today’s corporate arena, a significant wave of change known as Agile, which has transcended the boundaries of software development alone, embracing a broad spectrum of sectors with determination and success.

This approach, renowned for its adaptability and agility in meeting customer needs, has recently embraced Lean principles, resulting in a hybridisation that promises to redefine business efficiency and productivity.

The Alchemy between Lean and Agile for Continuous Progress

Combining Lean principles with Agile is a promising combination that harnesses the essence of both methodologies. Lean, with its focus on minimising waste and optimising workflows, merges synergistically with Agile.

This combination has generated concrete solutions, such as the integration of Lean practices like Kanban or Kaizen into Agile methodologies, speeding up the decision-making process and providing more immediate responses to customer requests.

A Revolution Outside Software

The versatility of Agile is not limited to the world of code. Today, business sectors such as marketing, project management and human resources embrace Agile principles.

For example, in marketing, Agile enables a rapid response to market changes by adapting advertising strategies in real time. In the field of resources human resources, the use of Agile methodologies such as Scrum simplifies and accelerates the recruitment process.

The Key to Successful Agile Adoption

Implementing Agile is not just a matter of adopting new tools, but requires a profound cultural change. This transformation implies a shift from rigid hierarchies to more flexible and collaborative structures. Teams that embrace these new dynamics are better able to adapt to change, thanks to the transparency and shared responsibility promoted by Agile methodologies.

Agile, enriched by Lean principles, is redefining the way companies operate. Its adaptability makes it a key resource in many work contexts. However, in order to reap the full benefits of this methodology, a profound cultural change that favours collaboration and innovation. It is only through this change of mindset that organisations can exploit the full potential of Agile and achieve significant competitive advantages.

AGILE DEVELOPMENT: A GLANCE AT THE BENEFITS OF THE AGILE METHODOLOGY

The Agile methodology is an approach to the software development process that focuses on flexibility, collaboration and incremental delivery of working products. It was introduced to address the limitations of traditional software development methodologies, such as the Waterfall model, which often tend to be inflexible and poorly adaptable to change.

Here are some key concepts of the Agile methodology:

  • Iteration and Augmentation: Instead of developing the software in one large iteration, the Agile approach involves dividing the work into small iterations, called ‘sprints’. Each sprint usually lasts one to four weeks and produces an increment of usable functionality.
  • Prioritising customer needs: Agile places a strong emphasis on customer involvement throughout the development process. Customer needs and requirements are taken into account continuously and can be adapted during the project.
  • Collaboration and communication: Agile promotes regular communication and collaboration between development team members, as well as with the customer. This means that team members work together to address challenges and make decisions.
  • Self-organised teams: Agile teams are encouraged to be self-organised, which means that they are responsible for planning, executing and controlling their own work. This fosters an environment in which team members feel empowered and motivated.
  • Adaptability to change: Agile recognises that requirements and priorities may change during the course of the project. Therefore, it is designed to be flexible and able to adapt to new information and requirements.

 

There are several specific methodologies within the Agile approach, including Scrum, Kanban, and XP (Extreme Programming), each with its own practices and tools. In this in-depth look at one of the most popular methodologies: Scrum

 

Agile methodology: SCRUM

The SCRUM methodology is a framework that is used by a team to manage complex projects in order to extract as much value as possible through iterative solutions.

 

The SCRUM pillars

Scrum is framed within the framework of agile methodologies and is based on flexibility in adopting changes and the cooperation of a group of people sharing their expertise. The strength of this methodology is its empirical approach: knowledge is derived from experience, so decisions are made from what has been observed.

 

The most important pillars and features of this methodology are :

  • Transparency: the whole team involved is aware of the various stages of the project and what happens.
  • Inspection: In order to make these elements transparent, progress towards agreed targets must be inspected and evaluated in order to detect undesirable problems.
  • Adaptation: If and when there is something to change, the materials produced must be adapted and the whole team adapted to achieve the Sprint objective.

 

Before going on to define what Sprint is, it is necessary to provide an explanation of the three most important figures of the SCRUM method:

  1. The Product Owner is responsible for maximising the value of the product by defining and prioritising the functionalities to be developed, and works closely with the Scrum team and stakeholders to ensure that the product meets the users’ needs.
  2. The Scrum Master is in charge of making SCRUM theory and practices understood by all.
  3. The SCRUM Team consists of a Scrum Master, a Product Owner and the Devolopers (those who are in charge of creating any aspect of a usable increment at each Sprint). It is a cohesive unit of professionals who evaluate the activities of the Product backlog without any outside influence. Their common thread is shared responsibility.

 

The stages of the SCRUM process.

Let’s talk about Sprint (Iteration) again. It is the beating heart of SCRUM because everything that happens to give value, happens within a Sprint. The maximum duration is one month as having longer Sprints can result in the loss of valuable customer feedback.

The next phase is Sprint planning, which kicks off the Sprint by setting the work to be done. The whole team must have a goal (the Sprint Goal) and must work together to define its value and/or increase it through discussion.

The purpose of the Daily SCRUM is to inspect the progress towards the Sprint Goal and to adapt the Sprint backlog as needed. It is a meeting that lasts a maximum of 15 minutes and must necessarily be attended by the developers of the Scrum team. The purpose is to improve communication and promote rapid decision-making, eliminating the need for further meetings.

The Sprint Review is the penultimate of the Sprint events and lasts a maximum of four hours for a one-month Sprint. Its purpose is to inspect what has been completed or changed in the context of the Sprint.

The Sprint Retrospective is the last phase of the SCRUM methodology and aims to plan ways to increase quality and effectiveness. It is a great opportunity for the SCRUM team to self-assess what improvements or problems have emerged and how they have or have not been solved.

 

SCRUM Artifacts

In the context of Scrum, artefacts are documents or objects that are used to facilitate the planning, communication and monitoring of work progress during the course of a project. There are three main artefacts in Scrum:

 

Product Backlog:

  • Description: The Product Backlog is a prioritised list of all functionalities, features, updates and bug fixes that might be needed for a product. It is a kind of ‘queue’ of things to be done.
  • Owner: The Product Owner is responsible for the Product Backlog. It is his task to prioritise items according to the value they bring to the customer.
  • Priority criteria: Items higher up in the list have a higher priority and need to be better detailed. Items further down the list may be less well defined.
  • Updating and Refining: The Product Backlog is continuously updated and refined in response to customer feedback and changes in product requirements.

 

Sprint Backlog:

  • Description: The Sprint Backlog is a selection of items from the Product Backlog that the team commits to complete during a specific sprint. It contains only those items that the team believes can be completed within the duration of the sprint.
  • Responsibility: The team is responsible for its own Sprint Backlog. The Product Owner can provide guidance, but the team is free to organise the work as it sees fit.
  • Sprint Planning: The Sprint Backlog is created during sprint planning, which is an initial meeting in which the team selects items from the Product Backlog and determines how they will implement them.
  • Daily update: During the sprint, the team holds daily Scrum meetings to update each other on the status of the work and to adapt the plan according to new information.

 

Increment:

  • Description: The product enhancement is the result of sprint work. It is an evolution of the product that includes all functionalities completed and ready for delivery.
  • Requirement: Each increment must meet the Definition of Done criteria defined by the team and accepted by the Product Owner.
  • Presentation and review: At the end of each sprint, the team presents the product increment to the product owner and, if applicable, to the customer for feedback and acceptance.

These artefacts are fundamental to the functioning of Scrum, as they help to define, organise and track work during the development cycle. Each artefact has a specific role in the Scrum process and helps to maintain transparency and clarity in the work of the team.

 

In conclusion, it is necessary to emphasise how essential it is to clearly define the Scrum or Agile methodology in a written agreement as it provides a solid basis for the project success. A detailed contract establishes expectations, roles, responsibilities and delivery criteria, reducing ambiguities and conflicts. It also fosters collaboration and transparency between the parties involved, promoting a culture of continuous adaptation and improvement. This contractual approach creates an environment of trust and clarity, which is crucial to reaping the full benefits of agile methodologies, where flexibility and communication are central to success.

A guide to the tax advantages of investing in innovative start-ups in Italy

An innovative startup is a type of enterprise characterised by a high technological component and a scalable business model. They are emerging enterprises that seek to solve problems or satisfy market needs in an innovative way, using advanced technologies or new approaches through the implementation of creative ideas.

Innovative start-ups often operate in high-tech fields such as computer science, artificial intelligence, biotechnology, blockchain and more. They are characterised by a strong appetite for risk and investment in research and development to increase products. Moreover, these new companies̀ aim to expand rapidly nationally or internationally by seeking funding.

They play a predominant role in stimulating innovation, job creation and economic development.

Pursuant to the reference legislation (DL 179/2012, Art. 25, paragraph 2) an innovative start-up is a joint-stock company, also established as a cooperative, that meets the following objective requirements

  • it is new or has been established for no more than 5 years
  • it is resident in Italy, or in another country of the European Economic Area, but has its production site or branch in Italy
  • has an annual turnover of less than EUR 5 million
  • is not listed on a regulated market or multilateral trading platform
  • does not and has not distributed profits
  • has as its exclusive or predominant corporate purpose the development, production and marketing of a high-technology product or service
  • is not the result of a merger, demerger or sale of a business unit

Finally, a startup is innovative if it meets at least 1 of the following 3 subjective requirements

  1. it incurs R&D expenditure of at least 15% of the higher of cost and total value of production;
  2. it employs highly qualified personnel (at least 1/3 PhD, PhD students or researchers, or at least 2/3 with a master’s degree)
  3. is the owner, custodian or licensee of at least one patent or holder of registered software. 

Investing in an innovative startup can offer not only the opportunity to participate in the revolution and growth of promising enterprises, but also to obtain significant tax benefits. In this regard, the Italian government has introduced a series of tax incentives to encourage investments in innovative start-ups, with the aim of fostering the development of the entrepreneurial ecosystem and the creation of jobs in the new technology sector. In this guide, we will explore the main tax advantages offered to investors who decide to support these new Italian companies.

  1. De minimis tax incentive for investing in innovative start-ups and SMEs: The incentive provides a 50% IRPEF deduction intended for individuals investing in the venture capital of innovative startups or innovative SMEs. The incentives are granted under the “de minimis” Regulation (Commission Regulation (EU) No 1407/2013 of 18 December 2013).
  2. Tax credit for investments in innovative startups: One of the key measures is the tax credit for investments made in innovative startups. Investors can benefit from a tax credit of 30 per cent of the amount invested, up to a maximum of EUR 1.8 million per year. This means that a significant reduction in income tax can be obtained, effectively reducing the financial risk of the investment.
  3. Capital Gains Tax Exemption: In the event that a capital gain is realised from the sale of units or shares in an innovative start-up, the investor can benefit from a total exemption from capital gains tax. This exemption is a considerable advantage, as investors can keep the full amount of the gain without having to pay tax on their winnings.
  4. Deduction of losses: Investments in innovative start-ups involve a certain degree of risk, but the Italian government has provided a measure to mitigate any losses. Investors can deduct losses incurred by investing in innovative start-ups from their overall income, thus reducing their income tax. This possibility to deduct losses represents an important financial security for investors and may further stimulate interest in innovative start-ups.
  5. Capital Reinvestment Allowances: To further incentivise the reinvestment of capital in innovative start-ups, the Italian government has introduced a measure that allows investors to benefit from a 50 per cent tax break on reinvested profits. In other words, if one realises a capital gain from a previous investment in an innovative startup and decides to reinvest it in another startup, it will be possible to reduce capital gains tax by 50% of the reinvested amount.
  6. Facilitated tax regime for innovative start-ups: Innovative start-ups can benefit from a favourable tax regime that provides for a reduction of the corporate income tax (IRES) rate to 15 per cent for the first three years of activity and to 20 per cent for the next two years. This advantage translates into greater competitiveness for start-ups and caǹ make investing in innovative start-ups even more attractive to investors.

Investing in innovative start-ups in Italy offers numerous tax advantages that can attract more backers. From the IRPEF deduction of 50 per cent to exemptions on capital gains, via capital reinvestment allowances and the favourable tax regime for start-ups, the Italian government has put in place a number of measures to support and incentivise the innovative start-up sector.

The Affiliate marketing tax regime

Affiliate marketing is a business model whereby a company pays a commission to an affiliate for each sale or action generated through traffic sent from the affiliate’s own website or marketing channel. To be more clear, this is what happens: the affiliate promotes the company’s products or services through its website or through other channels: social media, email marketing or online advertising. If a user clicks on the affiliate’s link and makes a purchase or performs a specific action such as registration, the affiliate receives a commission on the sale or action performed. Affiliate marketing is, therefore, a business strategy of wide-ranging promotion through collaboration with websites or influencers and, at the same time, represents a profit opportunity for affiliate partners.

How to declare it

Flat-rate/simplified scheme

If you are an affiliate and have been granted access to the flat-rate regime, your taxation will be simplified compared to other forms of taxation. In fact, under the flat-rate scheme, taxable income is calculated on the basis of a flat percentage of turnover, without the need to file ordinary accounts.

As regards affiliate marketing, the income to be declared will consist of commissions received by affiliates. These commissions will be subject to the flat rate of 5 % or 15 % provided for by the aforementioned scheme.

As regards filling in your tax return, you will have to indicate, in the section on self-employment income, the nature of the income and the total amount of commissions received. In addition, you will have to fill in the RS box, which contains information on the tax regime adopted and the income to be declared.

In summary, if you are an affiliate and you are registered under the flat-rate scheme, your taxation will be simplified and the income to be declared will consist of the commissions received and subject to the flat rate of 5% or 15%. It is important to bear in mind that, according to the regulations, you cannot deduct expenses incurred for affiliate marketing activities in this status, but the regime does offer certain tax advantages and the possibility of benefits.

Sole proprietorship or partnership

Sole proprietorships and partnerships are further legal regimes that can be chosen, although they are different. In the former case, the VAT number is individual, whereas in the latter there may be one or more partners.

In terms of taxation, on the other hand, the two regimes are the same and we are talking about IRPEF taxation: as income increases, so does the amount to be paid in taxes. There are four different percentages that apply: 23%, 25%, 35% and 43%.

The first percentage is applied to income below 15,000€, the second for income from 15,001€ to 28,000€, the third from 28,001€ to 50,000€ and the fourth for amounts above 50,001€. However, as taxation is graduated, in the case of income of 30,000€, 15% will be calculated on 15,000€ and 25% on the remaining 15,000€.

Sole proprietorships and partnerships therefore allow tax to be calculated on a real margin, which is why the amount to be taxed is equal to the difference between income and expenses.

Remember, too, that you will have to keep track of the expenses incurred for affiliate marketing activities in order to be able to deduct the expenses incurred from your taxable income and reduce the tax payable.

Incorporated companies

If you own a corporation and engage in affiliate marketing, the applicable tax regime will depend on the legal form of the company.

If the company is an Srl (Limited Liability Company) or a SpA (Joint Stock Company), the income generated by affiliate marketing will be subject to corporate income tax (IRES), which currently has a rate of 24%.

The company will have to file a corporate income tax return (UNICO SC form), which contains all information on the income generated by the affiliate marketing, the expenses incurred and the applicable tax credits. In addition, the company will have to file a VAT return relating to the affiliate marketing operations carried out.

It is important to note that corporations may deduct expenses incurred for affiliate marketing from their taxable income. Such expenses include, for instance, advertising costs, website management costs and commissions paid to affiliates. However, deductible expenses are subject to limitations and restrictions and must be precisely documented.

Moreover, if the company transacts with affiliates located abroad, it may be subject to transfer pricing and cross-border transaction tax rules.

Crypto taxation in Italy: yesterday’s and today’s differences

Until today, cryptocurrencies were understood for tax purposes as ‘foreign currencies’, so the norm was to pay the 26% substitute tax on capital gains only for those who held more than €51,000 on their wallets for more than seven working days. Those, however, who were below this threshold were not subject to tax. Now, with the new rule introduced by the budget law, cryptocurrencies are no longer seen for tax purposes as ‘foreign assets’, but rather, as ‘crypto assets’, retaining the taxation regime that applies to what are called financial assets.

The tax authorities, as a result of the new rule, have been very clear: the exchange of crypto assets with each other (crypto to crypto) are not taxed, but apply the substitute tax of 26% on those capital gains realised, i.e. from a sale, if the latter exceeds the new threshold of €2,000. The term capital gain is a term that among us crypto investors is creating some confusion and needs some order: the capital gain is calculated from the aggregate of all transactions made even on different exchanges and, from 2023, also from income from other activities (such as NFT staking, farming, etc.). In addition, a stamp duty of 0.2 % per year is introduced for all crypto holders compared to the old regulation.

What does “cashout” mean?

Cashout means to collect, so the moment we go to cash euros into our account, we will pay the tax; but there is a novelty: if on the exchanges where we hold crypto at some point we convert them to FIAT ( Euro ) we will pay the tax there as well. 

How do I reduce the risk of crypto volatility and not have to pay tax?

The simplest and most effective solution to not converting crypto into FIAT right away and going to pay tax is to stay in crypto assets and, therefore, convert the tokens into stable coins, i.e. coins that have a dollar countervalue. Doing so also mitigates the risk of the high volatility by which the crypto asset market is characterised.

2022 tax return compared to the one to come.

As I said before, crypto used to be considered as foreign currencies and therefore one had to go and fill in the RW panel of PF income, as monitoring was mandatory. Otherwise, the RT panel had to be filled in if one went to make cashouts and paid the 26% tax. With the new regulation, the filling in of the RW panel for the monitoring obligation remains unchanged, but the role of intermediaries is changed. If we hold crypto via Italian exchanges, it will be up to them to fulfil their monitoring obligations in comparison with the tax authorities, but if we hold crypto in foreign exchanges or in DEFI wallets, Ledger, etc., we have to fill out the RW panel.

Are NFTs considered crypto assets?

Yes, they are considered crypto assets and belong to the category we have discussed. We draw attention to the fact that they are crypto assets, but different from cryptocurrencies. Let’s take a practical example: if we buy an NFT with Ethereum and then later sell it and receive Ethereum, it is as if we had made a capital gain or loss, so they will be taxable with 26% tax.

Is there a rule to regularise those who have never declared?

Yes, in fact, a rule already exists in our system and is called ‘ravvedimento operoso’; it consists of paying 0.5% per year of the amount already declared in the RW panel, plus any capital gains tax. If, on the other hand, one were to follow the new rule, it would suffice to always pay 0.5 per cent per year of the amount specified in the RW return and add 3.5 per cent of the amount reported in the RW return if other income were present. Finally, one could also take advantage of the revaluation process, which I will try to explain with an example: if in the past I bought Bitcoin for €5,000 and today it is worth €20,000, it is possible to apply the revaluation by paying 14% of the difference between 5,000 and 20,000. This way our tax position will be in order. In conclusion, therefore, capital gains or losses start to be calculated from 20,000 € and not from 5,000 € which would be our purchase price.