Is it necessary to declare them in my tax report?
Yes. For a long time, the incorporation of a new law in Parliament, the Anti-Fraud Law, has been heard for long time, it was not until July 10 when it was finally published in the BOE and became effective.
This new regulation has been implemented in order to increase control over cryptocurrencies. From now on, not only information of the sale must be provided to the Tax Agency but also all the information about the cryptos that are in the portfolio. All persons or establishments/entities that are residents in Spain or with activity here must declare all investments related to their currencies.
Likewise, exchanges must guarantee to the Tax Agency data on addresses, tax identification, price, and date, being able to apply penalties of up to € 5,000 for each data that has not been declared.
And ... how are they taxed?
Cryptocurrencies must continue to be recorded in box 389 "Other capital gains to be included in the tax base of savings" of the income statement.
However, while previously it was necessary to record only profits, now it is mandatory to record losses as well. For this reason, we recommend keeping track of all the transactions that have been made with cryptocurrencies from the first moment! 🤓
How to include cryptocurrencies in the Tax Report?
According to the description of the Dirección General de Tributos, exchanges between cryptocurrencies must be considered as exchanges of goods. Therefore, the profits or losses derived from the transmission of cryptocurrencies must be included in the income tax return. They will be taxed in the IRPF as any other capital gain. In the Rebellion app you can download the cryptocurrency transaction report.
In order to calculate the change in net worth, it will be necessary to take into account, on the one hand, the transfer value, which will be the higher of the market value of the virtual currency delivered or the market value of the currency received, and on the other hand, the acquisition value, consisting of the actual amount of such acquisition plus the expenses incurred, the difference between both of which will give rise to the gain or loss in net worth. difference between the two will give rise to the capital gain or loss.
Losses can be offset "without limit" against income from other assets included in the capital gains and losses. included in the capital gains and losses of the savings tax base. savings tax base. They may be offset against income from movable capital up to a limit of 25% of this type of gain. of 25% of this type of gains.
These capital gains and losses are included in the savings tax base. The amounts included in this base are taxed: The first 6,000 euros at 19%, the following 44,000 euros at 21%, and the rest at 23%. For the 2021 income, a fourth bracket of 26% is added as from €200,000.
Cryptocurrencies in Wealth Tax.
The Dirección General de Tributos considers that cryptocurrencies must be declared for Wealth Tax purposes for their equivalent value in euros as of December 31 of each year. In order to pay this tax it is necessary to determine and reflect what the value of the cryptos is at the time of the declaration. The minimum of this tax, which refers to the assets you have, depends on each Autonomous Community.
Should the Model 720 be filed?
The Law 11/2021, of July 9, on measures to prevent and fight against tax fraud
expressly includes the obligation of taxpayers to provide information on virtual currencies that they information on virtual currencies that they own and are located abroad, by submitting the abroad, by filing form 720. In other words, as of
2021, cryptocurrencies or virtual currencies are part of the assets and rights located abroad (e.g., cryptocurrencies or virtual currencies located abroad (e.g., balances in bank accounts, real estate, securities and insurance) susceptible to be declared.
About Mining of cryptocurrencies.
As additional information, those persons who mine cryptocurrencies must register as self-employed. As it is an economic activity, it could be similar to an employed work whose form of remuneration is in cryptos. Therefore, the person must register and follow the obligations that normally apply.