Cryptocurrency taxes in Spain, when to declare? taxes of cryptocurrencies, in Spain, what and when must be declared? In Spain, Bitcoin does not have a clearly established legal status, as in countries like El Salvador where Bitcoin is recognized as legal tender, or even in China, where all trade, including buying and selling, is prohibited, but its possession. , that is, having Bitcoin is allowed by law, as long as it has not been acquired in China after 2017 or mined in the country after 2020.

However, in Spain, although it does not have legal personality, bitcoin and cryptocurrencies are not prohibited, so their use is not illegal and the authorities are clear about what taxes on cryptocurrencies you must pay under certain conditions. But let's look at some cases.

The tax treatment of crypto assets in Spain was established through the Binding Consultations of the General Directorate of Taxes, establishing the jurisprudence of some first cases on the general rules to apply.

They are obliged to declare those who are considered tax residents in Spanish territory. A person is a tax resident in Spain when they stay more than 183 days in the country (this also includes foreigners), even with sporadic absences during that time.
When a person establishes the main nucleus of interest in Spain (when the spouse and minor children depend economically on the taxpayer), the basis of their economic activities or interests, whether directly or indirectly, is already considered a tax resident.
When your direct family also resides in Spanish territory.

Filing income tax is mandatory every year.

One of the main concerns of cryptocurrency users is the payment of taxes and, in the spreads of the Spanish Treasury, it is very clear that users of cryptocurrencies such as Bitcoin must pay taxes in certain situations such as:

Income Tax (IRPF)
the Value Added Tax (VAT)
and finally, the Wealth Tax (IP)

But in addition to these, there are other taxes, whether at the state, provincial or local level. Some of them can also influence cryptocurrency investors. Such as Corporation Tax (IS), Tax on Economic Activities (IAE), or Inheritance and Donations (ISD).

However, as there is currently no clear regulation, cryptocurrency investors must determine how much tax they have to pay according to the general legislation.

Cryptocurrency taxes in Spain, when to declare?

It is important to note that according to the Spanish Tax Agency, especially V0999/2018, they clearly determine that taxes must be paid when any purchase or sale of cryptocurrencies is made, even if one cryptocurrency is exchanged or purchased for another, without using euros. . For example, if you bought a bitcoin for 10.000 euros and in a few weeks you completely exchanged it for 100 eth, and at that moment the bitcoin is no longer worth 10.000 euros, but 11.000 euros, we have earned 1.000 euros and we will have to pay taxes for this exchange.

However, if I do not make any movement with my cryptocurrencies and I do not sell any of them and even if they go up or down in value, I do not have to pay anything or declare anything. For example, if I kept my Bitcoin and it was worth 10 thousand euros and at the end of the year the btc is worth 15.000 euros, I do not need to declare any income gains. This is because I did not make any transactions.

Now, if you are a miner, and therefore, in theory, you would not have made any purchase of cryptocurrency, you still have to declare it because it is considered an economic activity, with the tax and social security obligations that this implies.

On the other hand, aspects such as cloud mining, lending, staking, airdroop, NFT gaming earnings and the metaverse have not yet been addressed by the tax authority, so in theory it is not necessary to declare them, but it's always good. to consult an expert in income taxation and reveal each particularity of your case to be sure.

Cryptocurrency taxes in Spain, when to declare?

Value Added Tax (VAT). After the ruling of the CJEU, in Spain, since 2015, Bitcoin is considered a means of payment and, therefore, its transmission and sale have been declared exempt from VAT as established by the Law itself (article 20.1.18).

Does that mean there are no taxes? Nope.

This means that investors in Bitcoin and cryptocurrencies do not have to pay VAT, but when it comes to Tax on the Income of Physical Persons (Tax on Income of Physical Persons – IRPF), cryptocurrency investors have to pay their taxes. government taxes.

So in this case, there is no way to escape. If an individual carries out operations with cryptocurrencies, he will obtain income derived from economic activities, then he has to pay taxes, since these activities can generate a capital gain or loss, which will result from the difference between the acquisition price and the transmission price. (article 34). Therefore, it is integrated into the savings base of the personal income tax return for natural persons, as provided for in articles 33 et seq. Of law.

For simplicity, cryptocurrencies are taxed for capital gains and losses when buying and selling with them. All this activity has to be declared and accounted for, whether it was done with euros or if it was done only between cryptocurrencies, and then verify that each transaction generated a capital gain or loss and then pay taxes in the network at the end of the fiscal year based on the personal income tax economy. All of this is supported by V0808-18, V1604-18, and V0999-18 queries.

Cryptocurrency taxes in Spain, when to declare? Wealth Tax (IP)

In accordance with articles 24 and 28 of the Law, the entire value of the cryptocurrencies owned by their holder must be credited to IP as of December 31, according to their market value at that time. This is indicated by the binding consultation V2289-18, in which it was determined that it must be declared as if it were capital in foreign currency, being valued on the calculation date, at the market price in annual euros as of December 31.

In this way, they will be accounted for together with the other assets and rights that it possesses, taking into account the net worth, deducting the corresponding charges and charges that reduce the value, and the corresponding debts or personal obligations to which it is subject. affected. For this purpose, they are treated as if they were capital in foreign currency, since they are considered virtual currencies, as established in the binding queries V0590-18 and V0250-18.

Inheritance and Gift Tax (ISD)

If it is a mortis causa transmission (when a holder dies and his heirs receive them), this tax is applied, and the market value of the cryptocurrencies at the time of transmission will be taken into account.

If it is a live broadcast This tax is also applied taking into account the value of the cryptocurrencies existing in the market at the time of this donation, but, in addition, the donor will pay personal income tax for the increase or decrease in their assets. for the issuance made, in turn the donee will be taxed by the ISD.

Property Transfer Tax (ITP)

In this tax, there may also be the case of transmission of some cryptocurrencies in exchange for others, in the following two situations:

  • If it is an exchange of cryptocurrencies between natural persons, the taxable event is subject to this tax.
  • If it is an exchange between a businessman or professional and a natural person, in the case of the businessman or professional, this tax will be subject to VAT, while in the case of a natural person, the taxable event will be subject to the transfer tax. expensive. .

Text made with the collaboration of Andorra Insiders