Some tips on how to keep up to date with cryptocurrency tax declaration in Spain.
Despite the recent drop in the price of cryptocurrencies, the crypto asset market continues to attract investors every day and moves billions of dollars around the world. With the expansion of this market, regulators have also set their sights on the cryptocurrency ecosystem.
Therefore, in most countries around the world, cryptocurrency investors must declare their assets to the government and eventually pay taxes on profits made from digital assets. This occurs even in countries where the government has not yet approved comprehensive and clear legislation on cryptocurrencies, as is the case in Brazil, the European Union, and even the US.
In the case of Spain, the same thing happens and even without the country having a specific regulation for cryptocurrencies, it is still necessary for crypto investors to pay taxes on the profits from their operation in the crypto market.
Types of Taxation in Spain
In Spain, investors are subject to three types of taxation, according to the legislation in force in the country. The first of these is the Personal Income Tax (IRPF). In addition, any natural person who owns cryptocurrencies and whose assets have a value greater than the minimum established by their Autonomous Community (the limit is usually around 600,000 euros) must file the Wealth Tax.
“When asked if cryptocurrencies are taxable, the clear and direct answer is yes, they are taxable on the income statement. However, not all transactions made with them are subject to taxes”, highlight the TaxCripto experts.
Regarding capital gains or losses derived from transfers and income from movable capital, Taxcripto explains that the return, when up to 6 thousand euros is obtained, investors must pay 19% tax on profits, 21% from 6,000 to 50,000 euros, 23% between 50,000 euros and 200,000 euros and 26% in the case of income over 200,000 euros.
As for profits or losses from operations not derived from transfers, the rate is unique: 47% on income.
From the National Securities Market Commission (CNMV) in Spain, they think differently from the position of the Bank of Spain
“Finally, we find the category of income from economic activities, which includes, for example, mining operations (set of processes necessary to validate and process cryptocurrency transactions and receive a reward in exchange) and negotiated sales to third parties. This is the simplest way to tax cryptocurrencies, as it makes no difference from the taxation of any other economic activity. To do this, we must be registered in a certain section of the IAE (model 036 or 037), registered in the RETA, and present quarterly (130) and annual (347) models, “says the company.
The second is the Wealth Tax. Taxcripto highlights that for this tax it is necessary to fill in form 714, without the need to add VAT. Specifically, it is section Q, under the heading “Balances in virtual currencies”.
Finally, there is the Inheritance and Gift Tax (ISD). In this case, Taxcripto explains that the number of units and the value of the cryptocurrencies received must appear on the date the donation or death occurs. At this time, the treatment for DSI purposes will vary depending on one case or another, for example, if whoever is doing the donation is a natural or legal person, among other cases.
By Audy Castaneda