TaxDown’s tax specialists point out that currently there is no direct regulatory framework for cryptocurrencies and that they are governed by the conventional system of capital gains and losses.
Currently the regulation around cryptocurrencies and NFTs is extremely green. We must point out that the genesis block of the Bitcoin network was generated on January 3, 2009. Cryptocurrencies in just over a decade have seen great adoption and expansion.
TaxDown highlights that the income campaign in Spain will start on April 6. This means that much of the 4 million people holding cryptocurrencies must report it. These cryptocurrencies must be included in the income tax return.
Only those who have sold any of the cryptocurrencies acquired, regardless of whether they made a profit or a loss. If this process is not done, the penalty for the tax debt could reach up to 150%.
According to the “III Report on fintech knowledge and habits” by Asufin, there is currently a great lack of knowledge about the tax burden of cryptocurrencies. The report states that more than 41% of investors believe that they will not have to pay taxes for your earnings with cryptocurrencies. While more than 28% of holders do not know if they should include it or not in the income statement.
This report states that more than 70% of users have invested more than 1,000 euros in cryptocurrencies. Likewise, a quarter of users have invested more than 6,000 euros.
Declaration of cryptocurrencies in Spain
For the declaration of cryptocurrencies the FIFO method must be used. We are talking about a system of accounting for gains on the sale of shares when the assets have been purchased at different times.
This system establishes that the first to buy are the first to consider when we make a sale of cryptocurrencies. The capital gain is established by subtracting the value of the transfer, the value of the acquisition and the expenses of the operation. We are talking about a complex process that the user must face, including certain variables. To do this, TaxDown has created a step-by-step guide, available on its site, on how to declare cryptocurrencies.
Further, Cryptocurrency mining and NFT trading have sparked controversy. Mining, according to tax specialists at TaxDown, should be considered an economic activity. This means that the cryptocurrencies obtained in the process would have to be declared as income.
Regarding NFTs, there is still no regulation in this regard. It is contemplated that the companies that manage these digital assets must report on them.
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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.