This is the most important — and most frustrating — rule for investors in Italy. The law divides financial income into two 'buckets' that cannot be mixed when offsetting losses (minusvalenze).
The two buckets:
- Redditi di Capitale: These are the 'fruits' of investment. They include dividends, bond/deposit interest, and — crucially — gains from selling funds or ETFs.
- Redditi Diversi: These are pure capital gains (plusvalenze). They include the sale of individual shares, bonds, or cryptocurrencies.
⚠️ Important
The problem with Minusvalenze (losses): In Italy, tax losses can ONLY be used to offset Redditi Diversi. You could NEVER use a loss to offset a Reddito di Capitale.
💡 Example
The ETF trap: If you sell an ETF at a 1.000 € gain, the tax authority treats it as a Reddito di Capitale and you would pay 26%. If you sell an ETF at a 1.000 € loss, it is treated as a Reddito Diverso. Result: you could not use your ETF loss to offset your ETF gain. To use that loss, you would need to generate gains by selling individual shares (which are Redditi Diversi).