Experts advise how to be up to date with the declaration of cryptocurrencies in the IRPF in Spain

Experts advise how to be up to date with the declaration of cryptocurrencies in the IRPF 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 of 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.

In Spain, investors are subject to three types of taxation, according to the legislation in force in the country. The first of them is him Personal Income Tax (IRPF). In addition, any natural person who is the holder of cryptocurrencies and their 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 straightforward answer is yes, they are taxable on income tax returns. Nevertheless, not all transactions made with them are taxable”, highlight the experts of TaxCripto.

The company explains that taxation occurs depending on the type of income obtained:

  • Capital gains or losses derived from transmissions,
  • Gains or losses from operations not derived from transmissions (airdrop, hard fork, etc.)
  • Returns on mobile capital (participation)
  • Income from economic activities.

Regarding capital gains or losses derived from transfers and income from movable capital, Taxcripto explains that the profitability, 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% when it comes to income over 200,000 euros.

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As for the profits or losses from operations not derived from transfers, the rate is unique: 47% on income.

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 return) and negotiated sales to third parties. This is the simplest way to tax cryptocurrencies, as it makes no difference between the taxation of any other economic activity. To do this, we must be registered in a certain section of the IAE (form 036 or 037), registered in the RETA and present quarterly (130) and annual (347) forms.”, says the company.

As for 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”. Therefore, all investors who have balances in cryptocurrencies as of December 31 of each year must complete this box.

Lastly, 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 the donee is a natural or legal person, among other cases.

Disclaimer: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.

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Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.