HASHBURST

The MiCA (Markets in Crypto-Assets) Regulation, approved by the European Union in 2023, is a regulation aimed at creating a unified legal framework for the regulation of cryptocurrencies and related services within the European market.
The MiCA regulation mainly focuses on:

• The regulation of issuers of crypto-assets (such as stablecoins or utility tokens).
  
• The protection of investors through rules covering transparency, disclosure of information, and requirements for cryptocurrency service providers (e.g. exchanges, wallet providers).
  
• The fight against money laundering and compliance with AML (Anti-Money Laundering) and KYC (Know Your Customer) regulations.
  

Why mining is not directly regulated by MiCA:
Mining, i.e. the process of validating transactions and creating new blocks in proof-of-work blockchains (such as Bitcoin), is not considered a financial or asset issuing activity. The MiCA was developed to regulate financial activities related to crypto-assets, such as the issuance, exchange, custody and provision of services related to these assets. Mining, per se, is a technical activity that concerns the validation of transactions on the blockchain, not an activity of issuing or managing financial instruments.
European Crypto Assets Regulation (MiCA)

The tax regulations for cryptocurrency mining in Italy and other European countries vary widely. Each country treats mining differently depending on the tax framework and the definition of economic activity related to cryptocurrencies.
Here are some examples with reference to the date 6 October 2024:
1. Italy
In Italy, there is no specific tax legislation for cryptocurrency mining, but this activity is framed under general income and economic activity laws. The main guidelines are as follows:

• Taxation on mining income:
  
• If the mining activity is considered occasional (carried out on an amateur or hobby basis), the profits derived could be taxed as miscellaneous income and subject to IRPEF (Personal Income Tax).
  
• If the mining activity becomes habitual and continuous, it is considered a business activity, subject to ordinary taxation on business income and, in the case of companies, to IRES (Corporate Income Tax) and IRAP (Regional Tax on Productive Activities).
  
• Taxation of gains from the sale of mined cryptocurrencies:
  
• When mined cryptocurrencies are sold, the gain may be subject to taxation as miscellaneous income, if made by individuals. For businesses, the gains are part of business income.
  
• VAT: In accordance with decisions of the European Court of Justice, cryptocurrency mining is not subject to VAT, as it is not part of a supply of a service involving a direct exchange between two parties.
  

2. Germany
In Germany, mining is regulated as a taxable business activity and follows a similar treatment as other economic activities:

• Taxation on mining income:
  
• Mining is considered a business activity and profits are subject toincome tax for individuals orcorporate tax (Körperschaftsteuer) for companies.
  
• VAT: Cryptocurrencies obtained through mining are not subject to VAT in Germany, in line with EU regulations.
  
• Capital gains taxation: Cryptocurrencies held for more than one year are exempt from capital gains taxation. If sold within one year, profits above EUR 600 are taxed as ordinary income.
  

3. France
In France, the tax treatment of mining varies depending on whether the activity is carried out as an occasional or professional activity:

• Taxation on mining income:
  
• If the mining is carried out occasionally by an individual, the profits are taxed as personal income in the category of non-salaried employment income.
  
• If mining is carried out professionally, the profits are taxed as business income, which means that the miner must register as a company and follow the business tax regime.
  
• VAT: Even in France, mining is not subject to VAT.
  
• Capital gains taxation: Cryptocurrencies held for a long time and then sold are subject to capital gains tax if the gains exceed certain limits.
  

4. United Kingdom
In the UK, mining is subject to different tax regulations depending on the nature of the activity:

• Taxation on mining income:
  
• If mining is carried out on a personal and non-professional basis, profits are considered income subject to IncomeTax and National Insurance.
  
• If mining is carried out as a business activity, profits are subject to Corporation Tax or Income Tax, depending on whether you are a business or a private individual.
  
• VAT: VAT does not apply to mining per se.
  
• Capital Gains Tax: Cryptocurrencies sold after being mined are subject to Capital Gains Tax if there is a gain on the sale.
  

5. Spain
In Spain, the tax treatment of mining varies depending on whether it is considered a professional or non-professional activity:

• Taxation on mining income:
  
• Mining is considered an economic activity, and profits are subject to taxation as self-employment income or business income.
  
• VAT: Mining is also not subject to VAT in Spain, in line with EU regulations.
  
• Capital gains taxation: Cryptocurrencies sold after being mined are subject to capital gains tax.
  

6. Sweden
In Sweden, mining is considered a taxable activity, but with some special nuances:

• Taxation on mining income:
  
• Mining is considered a business activity and profits are subject to ordinary taxation. In addition, the miner may be subject to social security contributions.
  
• VAT: In accordance with European regulations, mining is not subject to VAT in Sweden.
  
• Environmental aspects: Due to the Swedish focus on environmental impact, there are discussions about possible restrictions or additional taxes on mining that consumes large amounts of non-renewable energy.
  

Conclusions:
In general, in Europe, cryptocurrency mining is treated fiscally as an economic activity, subject to personal or business income taxation, with rules varying depending on the frequency and scale of the activity. However, most countries follow a common line where mining is not subject to VAT, and cryptocurrencies mined and subsequently sold are subject to capital gains tax.
For up-to-date and official information, please consult the official website of the European Union