Cryptocurrencies generated great benefits for investors during 2020. In fact, bitcoin appreciated by 300% during this year. This huge amount of income forces us to ask ourselves: how do I declare this new heritage?
Cryptocurrencies are relatively recent, so it is normal that there are doubts about how to pay them and include them in the income statement. So much so, that the Tax Agency received 60,000 inquiries about crypto assets during the previous campaign.
The problem is that there is still no specific tax regulation in Spain. However, that does not exempt investors from declaring these products.
How to declare cryptocurrencies
The end of the term to present the income tax return is approaching and a series of aspects must be taken into account when including these investment products in it:
– The purchase and sale of cryptocurrencies is exempt from VAT payment. For the Tax Agency, for practical purposes, the cryptocurrency is considered as a currency; so it is under the current legislation on the exchange of traditional currencies, whose operations are subject to VAT but exempt from paying it.
– People who are dedicated to the purchase and sale of cryptocurrencies through their own platform would be carrying out a business activity, for which they are obliged to register with the Tax on Economic Activities (IAE).
– Since cryptocurrencies are considered means of payment, the Tax Agency understands that virtual wallets are checking accounts. Therefore, if these virtual currencies are only deposited and not operated with, they do not have to be taxed.
– When an exchange of cryptocurrencies is made, such as the conversion of bitcoins into ethers, the investor will have to pay taxes on the profit or loss generated. To find out what the tax should be, subtract the higher of the following concepts from the acquisition value of the asset delivered: market value of the asset delivered or of the asset received.
– These types of exchanges, whether in another virtual currency or in FIAT money, must be declared in the IRPF, including them in the capital gains and losses section of the savings tax base, which is taxed as follows:
-19% for the first 6,000 euros.
-21% for the basic section between 6,000 and 50,000 euros.
-23% for the section greater than 50,000 euros.
– In the Wealth Tax, the cryptocurrencies owned on December 31 must be reported and they will be taxed for the market value they had on that date. However, the specifications on this tax are assigned to each Autonomous Community.
– In the Corporate Tax, the cryptocurrency is taxed at 25%, depending on the difference between the cost and the benefit of the sale. In addition, a 10% amortization can be added for value impairment.
– Cryptocurrency mining is considered an economic activity, so the amounts received must be declared in the IRPF as income derived from economic activity. In addition, this also allows the expenses derived from the exercise of the activity to be deducted.
– Transfers of NFTs are taxed with VAT or Professional Transfers. In other words, if it is a professional carrying out an operation derived from his activity, he will have to pay VAT, while if the seller is an individual, the operation would be taxed with the Professional Transfer Tax.