Regolamentare Bitcoin? | Paolo Burlone | TEDxBariSalon
## Speaker Context * Speaker identity: Accountant (self-described bad guy good at filing F24s). * Audience, setting, occasion of the talk: Unknown, but involves discussing tax implications and the spread of technology. * Any framing the speaker establishes for themselves up front: Presents himself as an accountant who handles paying taxes. ## People * Client friend: Friend who showed up to the speaker in 2013 and recounted experiences in London. * Father: Speaker's father (mentioned in relation to the friend's trip to London). ## Organizations * Central bank: Entity that mints money. * ECB: The central bank in the European Union. * European Union: Governing body regarding currency and VAT. * Revenue Agency (Italian): Tax authority that must rule on Bitcoin. * Bank of Italy: Financial institution mentioned in relation to anti-money laundering legislation. * European Court of Justice: Court that rules on matters like VAT. ## Places * London: City where the friend lived after being sent by his father. * Italy: Country where the speaker is located and where tax laws are discussed. * European Community: Previous name for the area where VAT is harmonized. ## Tools, Tech & Products * Laptop: Nice laptop used by the friend. * Bitcoin: Digital/electronic currency mined by the friend. * Bitcoin network: The network where mining occurs. * Nodes: Subjects participating in the Bitcoin network. * Blockchain: Technology underlying Bitcoin; constantly evolving. * Public address: Bitcoin user identifier visible on the blockchain. * Private key: Necessary to associate a public address with an owner. ## Concepts & Definitions * Bitcoin: Electronic currency, subject of transactions and mining. * Mining: Activity of subjects participating in the Bitcoin network to verify transactions and solve a problem for block validation. * Block: A new page/record containing validated transactions. * Legal tender currency: A currency that is accepted as payment. * Fiat currency: Legal tender currency. * Means of payment: A category that Bitcoin is argued to fall into. * Double taxation: A subtle form of taxation that exists. * Anti-money laundering legislation (AML): Legislation designed to monitor financial flows to prevent illicit markets or terrorism financing. * Anti-terrorism financing legislation: Legislation designed to monitor financial flows to prevent funding of terrorism. ## Numbers & Data * 500 euros: Amount for a ticket to London. * 2013: Year when the client friend showed up. * 50: Age mentioned (implied threshold for learning/maturity). * 165 thousand euros: Hypothetical revenue figure mentioned in the context of 2017. * 31 12 2000: Date related to tax calculation comparison. * 30 June: Date mentioned in tax calculation comparison. * 2014: Year associated with the European Court of Justice ruling regarding VAT. * 2015: Year the European Court of Justice sentence was published. * 2016: Year the Revenue Agency was expected to rule on Bitcoin. * 2017: Year used in a hypothetical tax calculation example. * 2018: Year associated with tax payments and rulings (e.g., Article 956 bara 39 of 2018). * 90 to 94: Article range from 2000 concerning the internet. * 5th directive: European directive defining virtual currencies. ## Claims & Theses * The speaker is an accountant who deals with taxes. * The tax period of paying taxes can be "worse and more evil than at any other time of the year." * The father advised the friend to go to London and "manage on your own." * The friend's experience in London involved learning "to live, learn to be in the world, and learn to be in the world." * Bitcoin mining is the result of network activity involving nodes verifying transactions and solving a problem for each block. * If one gets remuneration for work, it generally means a form of income has been created. * Income categories in Italy depend on the person (natural/legal), the activity (subject in business/employed), and the object (goods/services/money). * The central bank mints money not as a source of income, but to regulate monetary policy. * Bitcoin could function as a good alternative payment method, similar to cigarettes in concentration camps. * The operation of setting up an exchange is nothing more than an intermediation operation. * The speaker claims that Bitcoin, in the context of VAT, should not be treated as a service provided that requires VAT exemption. * The European Court of Justice ruled (in C 264 of 2014) that Bitcoin is not a true legal tender currency. * Bitcoin's singularity is that it can only be used exclusively as a means of payment. * The revolution of Bitcoin is that the transaction is written on a public, checkable block. * The speaker argues that the law must be cautious to not impede the development of such liquid technologies. * The law should set limits, but going beyond legality is not possible. ## Mechanisms & Processes * Bitcoin mining process: Nodes verify transactions proposed to the protocol and solve a problem at the basis of each block to validate transactions. * Income categorization in Italy: Based on two subjective characteristics (natural/legal person, type of activity) and one objective characteristic (goods, services, money). * Money creation by the state: The mechanism by which money is created, distinct from private money. * Anti-money laundering process: The monitoring of financial flows to ensure they do not fund illicit markets or terrorism. * Public address linkage: Associates a public address to a subject via forensic activity (connecting IP address to public address). ## Timeline & Events * 2013: Client friend shows up recalling time in London. * Period of calculating taxes (time unspecified): When the speaker experiences intense tax stress. * Historical example: Use of cigarettes as currency in concentration camps. * Event: Bankruptcy of crypto exchanges, resulting in lost bitcoins and uncollected income. * 2014: European Court of Justice ruled on VAT matter. * 2015: Sentence from the European Court of Justice was published. * 2016: Year the Revenue Agency was expected to rule on Bitcoin. * 2017: Year used in a hypothetical tax calculation involving ten coins. * June 2018: Date when taxes were to be paid in the hypothetical scenario. * 31 December 2000: Date used in a tax calculation comparison. * Article 956 bara 39 of 2018: A ruling from the Lombardy regional directorate. * Date implied: Current time, where the speaker is addressing the need for legislative change. ## Examples & Cases * The friend's move to London: Sent by his father with 500 euros to learn the language and live independently. * The friend's odd jobs: Ranging from small-scale coastal shipping to becoming a bartender. * The friend's mining activity: Started by using his laptop and internet connection after his computer was stolen. * Cigarettes in concentration camps: Example of goods taking on a function beyond their main purpose as currency. * The sale of property/goods: The speaker's expert ability to determine if an item's sale constitutes a taxable business activity or channel activity. * The first big failure: A collapse of crypto exchanges where the friend held bitcoins, resulting in lost income. * The European Court of Justice ruling (C 264 of 2014): Investigated if goods like cigarettes and gold could serve as payment means. * The tax deduction challenge: Calculating profit based on the asset's secondary market valuation (e.g., 10 coins valued at 2017). * The ruling of the Court of Cassation, United Sections: Stated that two prior rulings by the Revenue Agency were "waste paper and have no legal value." * The bakery accepting Bitcoin: A hypothetical scenario for anti-money laundering filing requirements. ## Trade-offs & Alternatives * **Crypto vs. Cash/Credit:** Bitcoin as a payment means vs. credit that requires goods/services for boasting. * **Direct Bitcoin Use:** Using Bitcoin immediately vs. selling it to obtain Euros to pay taxes. * **Current Legislation:** Relying on existing AML procedures (e.g., filing at the baker's) vs. the inherent technology of Bitcoin. * **Legal Status Equivalence:** Treating Bitcoin like a foreign currency (as per some arguments) vs. adhering to the EU's 5th directive stating it lacks legal tender status. ## Counterarguments & Caveats * "If it were up to me, he would n't pay the taxes." (Speaker's initial thought on tax compliance). * "If I go and get myself, I'll study." (Said in relation to understanding tax law). * The speaker wavered about money because of the statement, "If I go and get myself, I'll study." * The EU's 5th directive clearly states that virtual currencies "do not possess the legal status of desired currency." * The Italian implementation proposal for the directive "deletes that phrase not possessing the legal status of desired currency." * The speaker suggests the "anti-money laundering filing to the baker for all his customers who want to pay him with bitcoin" is something the technology makes unfeasible. ## Methodology * The speaker uses legal text review (checking consolidated tax law and VAT law) to analyze the status of Bitcoin. * The speaker draws on jurisprudence by referencing the European Court of Justice and the Court of Cassation. * The speaker performs a conceptual analysis, comparing Bitcoin to established payment mechanisms (currency, loan, title, barter). ## References Cited * Consolidated tax law. * Consolidated VAT law. * European Court of Justice (case C 264 of 2014). * Article 956 bara 39 of 2018 (Lombardy regional directorate ruling). * Court of Cassation, United Sections (ruling cited). ## Conclusions & Recommendations * The speaker recommends that the legislator must create a terrain that "must not hinder" the type of activity. * The speaker urges that the legislator must understand the current state of Bitcoin/crypto technology. * The primary recommendation is that the law must evolve to adapt to the technology rather than trying to force compliance using outdated methods. * The final warning: "We will say no dear legislator, we cannot go on like this." ## Implications & Consequences * If the legislator does not understand the technology, the country risks losing opportunities for the future. * If the EU VAT system were to rule that VAT applies to Bitcoin, "half the blogging activity in Europe would not have developed." * If AML filings are forced onto everyday transactions (like buying tires or from a baker), the technology cannot spread into certain regions. * Failing to adapt means the Italian subject cannot keep pace in a "liquid world." ## Open Questions * What is the proper tax classification for activities involving cryptocurrencies that are accepted for payment? * How can the Italian legislator reconcile the need for AML compliance with the borderless nature of digital transactions without stifling innovation? ## Verbatim Moments * "I'm an accountant, an accountant, and with a bad subject, from whom you go when you have to do what to do that thing, certain, certain as death, exactly, paying taxes." * "I don't mind, dad, my bed, you stay there Because he has to learn the language, learn to live, learn to be in the world, and learn to be in the world." * "Bitcoin is nothing other than the result of the activity of the subjects who participate in the bitcoin network, such as nodes that take the trouble to verify all the transactions that are proposed to the protocol." * "In Italy, income categories are applied based on two fundamental subjective characteristics, namely the type of person who carries out the activity: a natural person or a legal person, a subject in business activity, or a person who carries out an employed or similar job." * "What is the singularity of bitcoin that can only be used exclusively as a means of payment?" * "The revolution of bitcoin is that the transaction is written on a block that can still be checked." * "The law must consciously do? The only thing it can do is set some limits." * "We will say no dear legislator, we cannot go on like this."