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."
Also seen as: regime fiscale
How the two regimes compare
The regimes change who reports and settles the tax, not the rate on a given gain. The table shows the difference as it works in real life; the next section says what the regime changes inside a backtest.
| 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 |
What does the tax regime change in a backtest?
Under Italy residency the regime changes three things in the simulation — when the tax is charged, how losses offset gains, and how a partial sale is valued — so two runs that differ only in regime can end with different tax figures even at the same rate.
- When the tax is charged. Under Declarative the year is settled as a whole: the year's net result is taxed once, when the next year begins. Under Administered each gain is taxed as it is realized.
- How losses offset gains. Under Declarative a loss offsets any non-ETF gain of the same year, whatever order they came in. Under Administered a loss only offsets gains realized after it; a gain taxed before the loss happened is not revisited. The window during which a loss stays usable is counted differently too — capital-gains tax has both rules.
- How a partial sale is valued. When a strategy sells only part of a position it built up over several purchases, Declarative treats the most recently bought shares as sold first, while Administered uses the average price of every share held.
How does Fincanva handle it?
- The regime is chosen from two options, "Declarative" and "Administered"; the default is Declarative.
- The regime only changes a result under Italy tax residency.
- 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. Under Other the field is shown, but the simulation applies the same rules as United States — tax settled once a year, on the year's net result — whichever regime you pick.
- 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. With Taxes off, no regime changes any figure.
What does it look like in practice?
Two simulations under Italian residency realise the same 1,000 gain in March and a 400 loss in September, and differ only in regime. Under the Declarative regime nothing is charged during the year: the year is settled as a whole when the next one begins, the September loss is set against the March gain, and the tax is 26% × 600 = 156. Under the Administered regime the March gain is taxed when it is realized, 26% × 1,000 = 260, and the September loss cannot reach back to it — it is carried forward, and only reduces gains the strategy realizes later. Same rate, same trades: the regime changed when the tax was paid and how much of the loss had been used by the end of the year.
This describes what Fincanva models in a simulation, not tax advice for your own situation — see Is this financial advice?.