As if making the Income Tax return was not complicated enough sometimes, in recent years, with the arrival of cryptocurrencies and their purely digital existence, other questions have arisen, such as the obligation or the process to declare them.
Around 4.4 million Spaniards (11.2% of the total) have invested or invest in cryptocurrencies, despite the general lack of knowledge about the supervision and taxation to which they are subject, as reflected by the III Report on fintech knowledge and habits of Asufin (Association of Financial Users).
The legislation on cryptocurrencies in Spain is still quite ambiguous despite the fact that it is being clarified from time to time, which can lead to many doubts about the process, forms and other documentation necessary to stay in peace with the Ministry of Finance and continue holding cryptocurrencies.
Changes for Income 2021
After the approval of the Law 11/2021of July 9, 2021, on measures to prevent and fight against tax fraud, the entry into force of a new regulation has been launched that brings with it a series of obligations for those who own cryptocurrencies or other types of crypto assets such as the NFTs.
cryptocurrencies
These new measures require the main fulfillment of two obligations in order to reinforce tax control over taxable events related to virtual currencies and thus increase transparency in operations with cryptocurrencies, establishing the obligation to report balances and holders of virtual currencies. coins in custody.
These measures focused only on operations carried out through Spanish platforms such as Bit2Me and 2gether, for example.
Bit2Me (Spanish exchange)
The reporting obligations related to holding and operating with virtual currencies are as follows:
- The obligation for companies that manage cryptocurrencies to report each of their different balances, as well as the identity of their holders.
- Those exchanges that comply with what is indicated in the text of the law, must report the addresses, tax identification, the price and the date of the operations carried out.
Model 720 for cryptocurrencies abroad
For the possession of cryptocurrencies in foreign wallets or exchanges (Coinbase, Binance, etc.), the declaration process is carried out with Form 720: Informative Declaration on Assets and Rights abroad.
Those taxpayers who have Bitcoin or other cryptocurrencies in international wallets will have the obligation to report on the virtual currencies of which they are holders. The deadline to submit it is March 31 of each year.
Capital gains tax rate
All those investors who have invested in cryptocurrencies and have subsequently sold them must include their operations in the Income Statement for that year, since they are taxed in the same way as any other capital gain.
bitcoin exchange
For the Income of 2021 (the one that is presented in 2022), a fourth tax bracket has been included for capital gains, with different types and different brackets:
- The first 6,000 euros, 19%
- Section from 6,000 euros to 50,000 euros, 21%
- The section from 50,000 euros to 200,000 euros, 23%
- For yields greater than 200,000 euros, 26%
Is cryptomining declared?
The service provided by miners is specifically the creation of blocks of value transactions. And this is recognized by the General Directorate of Taxes in several binding consultations, which consider that it is a financial activity that must be included in epigraph 831.9 of the First Section of the Rate of the Tax on Economic Activities.
Bitcoin in Income 2021
However, in the case of cryptocurrencies there is a peculiarity: there is no one to issue an invoice to, therefore, they are not subject to VAT, since the reward is automatically generated by a protocol. This is the criterion adopted by the European Union and respected by the Spanish Tax Agency, since it considers that these are operations that are not onerous in nature.
What should be taxed would be the payment on account of IRPF, in the case of being a natural person, and if it is a legal person, the payment on account of Corporation Tax, if applicable.
