What are the tax implications of using Bitcoin ATMs in a foreign country?

[scooterguy]

Let's say that a person lives in a territorial tax country or one with no capital gains tax (or both).

That person is on vacation in Italy, withdraws 5,000 EUR from a Bitcoin ATM, and then goes to an exchange to convert that money to his country of residence's currency. Flies back to his country with the cash (no need to declare it at the airport because the amount is small).

Legally speaking, would this trigger capital gains tax in Italy?

 

[TheCryptoAnt]

This is a reminder that it's important not to do drugs.

 

[scooterguy]

TheCryptoAnt said:
This is a reminder that it's important not to do drugs.
Click to expand...

Please elaborate further.

 

[Mercury]

scooterguy said:
Legally speaking, would this trigger capital gains tax in Italy?
Click to expand...

https://rue.ee/blog/italy-crypto-tax/
From 2023, whenever a person has gains exceeding 2,000 EUR, a 26% tax applies.

It seems it is applied to non-resident as well, DTA should apply too.

 

[scooterguy]

Mercury said:
https://rue.ee/blog/italy-crypto-tax/
From 2023, whenever a person has gains exceeding 2,000 EUR, a 26% tax applies.

It seems it is applied to non-resident as well, DTA should apply too.
Click to expand...

Very interesting. Thanks for sharing.

It doesn't seem like it applies to non-residents though. Only non-resident companies according to the text:

Tax residents are taxed on the income sourced in Italy and abroad, and non-resident companies are taxed only on the income sourced in Italy.

Of course, selling 5,000 EUR of crypto could imply 1 EUR in capital gains for all they know or even a loss, hence probably impossible and not worthy to go after a tourist for such insignificant amounts.

In any case, I'm curious about the topic because no countries seem to clarify this in the same way they do it with real estate sales (again, probably because of how hard it would be to track).

 

[Mercury]

scooterguy said:
It doesn't seem like it applies to non-residents though.
Click to expand...

I can't find any source stating that non-resident individuals do not have to pay tax on capital gains either.

https://taxing.it/wp-content/uploads/2018/12/Italy-2019-CJ-003_opt.pdf
An individual who is not tax resident in Italy will, in general, be liable to tax only on their Italian
source income.

I think tax will depend on how your crypto is considered from Italian source or not.