The action takes place within the framework of the recent “Campaña de la Renta 2020” (2020 Income Campaign). Spaniards who conduct transactions involving cryptocurrencies and euros must declare taxes.
A total of 14,600 taxpayers who conduct transactions with Bitcoin (BTC) and other cryptocurrencies will receive notifications from the Spanish Tax Agency. This action is part of the 2020 Income Campaign, which will run until June 30th this year.
This year, there are fewer notifications than in 2020, when more than 66,000 bitcoiners had to present the corresponding declarations. Jesús Gascón, general director of the Tax Agency, gave this information to the Spanish news agency Europa Press.
The regulatory agency said that “it is now possible to file the Income 2020 return through Renta WEB or the application. All help services for the online filing of the tax return are also available.”
Citizens Must Declare Their Earnings in Bitcoin and Euros
José Antonio Bravo, a tax economist, and accountant talked about the types of cryptocurrency transactions to declare. He explained that it is necessary to report transactions between cryptocurrencies such as Bitcoin and Ether, in addition to those involving euros.
“Binding Consultation V099-18 of the General Directorate of Taxes makes it clear that cryptocurrencies are intangible assets. For that reason, the changes that occur between them are exchanges of assets that produce capital gains and losses. Following article 37 of the IRPF (Income Tax) Law, it is necessary to include them in the annual return,” explained Bravo.
The economist said that the Tax Agency may not be able to detect transactions between cryptocurrencies. However, taxpayers run a risk when it comes to selling their cryptocurrencies for euros. They may have more than they can justify (or even different ones) or may have not reported earnings on time.
Traders would be opting to buy and sell cryptocurrencies on platforms without KYC protocols, but without exchanging to euros. In other words, the funds must always remain in Bitcoin, Ether, or Monero, as the case may be.
How the Ministry of Finance Controls Bitcoin in Spain
Spain is among the countries that most controls transactions with cryptocurrencies of their citizens. On other occasions, the State has approved bills to report this type of transaction. Last year, the “Law on Preventive Measures to Combat Tax Avoidance” received approval from the authorities.
The Minister of Finance of Spain, María Jesús Montero, then highlighted that the legislation seeks to achieve greater control of cryptocurrencies. The regulation in question includes cryptocurrency transactions such as the following: acquisition, transmission, exchange, transfer, collections, and payments.
Since 2018, Spain has approved draft laws related to Bitcoin. The final purpose is that citizens declare cryptocurrency transactions for the corresponding payment of taxes to the State.
Cryptocurrencies have been gaining prominence in the world market, which worries financial authorities in several countries. For that reason, there have been proposals to regulate the use of these types of assets and even to develop central bank digital currencies (CBDCs).
By Alexander Salazar