---
title: "Tax regime"
description: "The tax regime — Declarative or Administered — sets how gains from your simulated trades are reported and taxed: whether you file them or an intermediary does."
canonical_url: "https://fincanva.com/docs/backtesting/tax-regime"
last_updated: "2026-07-25"
md_url: "https://fincanva.com/docs/backtesting/tax-regime.md"
---

# Tax regime

The tax regime is the mode — **Declarative** or **Administered** — that governs how the taxable gains in your simulation are reported and settled. These are the two retail regimes used in Italy: under the Declarative regime you report your gains yourself in your own tax return, while under the Administered regime an intermediary calculates, withholds, and files the tax on your behalf. In the app the setting is "Tax regime", described as "How taxable events are reported in your jurisdiction."

## How the two regimes compare

The regimes change *who reports and settles* the tax, not the underlying rate on a given gain. The table shows the difference for the same taxable gain.

| | Declarative | Administered |
|---|---|---|
| Who calculates the tax | You | The intermediary |
| Who files it | You, in your tax return | The intermediary, at source |
| When it settles | At tax-return time | As events occur |
| Your visibility of gross gains | Full (you report each) | Handled for you |

## Defaults in Fincanva

- The regime is chosen from two options, "Declarative" and "Administered"; the default is Declarative.
- The regime pairs with your [tax residency](/docs/backtesting/tax-residency) to decide how gains are taxed in the simulation.
- The field is shown only for the **Italy** and **Other** residencies. Under **United States** it is not displayed at all, because the Declarative/Administered distinction is an Italian one.
- For Italian residency the capital-gains rates are set by tax law for the selected regime and shown as "Auto-updated" rather than edited by hand.
- The regime only reaches your results through the [Taxes assumption](/docs/backtesting/taxes-toggle). With Taxes off, no regime changes any figure.

## Worked example

Two simulations realise the **same 1,000 gain** and differ only in regime. Under the **Declarative** regime the gain is one you would report yourself at tax-return time, so you see the gross gain and the tax is settled later. Under the **Administered** regime the intermediary handles the same gain at source, withholding and filing the tax for you. The amount owed on that gain follows the applicable [capital-gains rate](/docs/backtesting/capital-gains-tax); the regime decides the reporting path, not a different headline number.

*This describes what Fincanva models in a simulation, not tax advice for your own situation — see [Is this financial advice?](/docs/investing-theory/is-this-financial-advice#is-this-financial-advice).*