So, you’ve been riding the crypto wave in sunny Spain. The market’s been kind, and your portfolio looks healthier than a Mediterranean diet. But have you considered the taxman’s appetite for your crypto gains? Don’t let a bull market turn into a tax nightmare.
Spain’s crypto tax landscape can be as complex as a Picasso painting. But fear not! We’re here to guide you through this maze. Understanding your tax obligations is crucial whether you’re a seasoned trader or a crypto newbie. From capital gains to income tax, we’ll explain everything you need to know in plain, easy-to-understand language.
Is Cryptocurrency Taxed In Spain?
Yes, cryptocurrency in Spain is taxable. The Agencia Tributaria considers crypto a capital asset, meaning it can be subject to general income tax and savings income tax. The tax rates depend on the type of transaction and your circumstances. You must report your crypto profits when you file your tax return.
Can The Agencia Tributaria Track Crypto?
Yes, the Agencia Tributaria is aware of your cryptocurrency activities. Here’s how they monitor it:
In July 2021, Spain passed the Law on Measures to Prevent and Combat Tax Fraud. This law mandates centralised crypto exchanges like Binance and Coinbase to share customer data with the Spanish government.
Before this, the Agencia Tributaria had already sent notices to around a million Spanish taxpayers. These notices informed them that their records showed crypto investments and encouraged them to report any profits. However, some recipients of these notices might not have engaged in taxable transactions; they might have only bought or held cryptocurrencies.
The European Union’s Sixth Anti-Money Laundering Directive requires financial service providers dealing with cryptocurrencies to adhere to stricter customer identification regulations. This data is shared among EU member states to help combat money laundering and illegal activities.
Additionally, the upcoming EU directive on data sharing, Dac8, is expected to enhance the Agencia Tributaria’s ability to verify individual crypto ownership and review crypto companies’ accounts.
Given this level of oversight, you must declare any profits or income from your crypto investments. Avoiding crypto tax reporting can result in severe penalties, including fines up to five times the amount you failed to declare and potential imprisonment.
How Is Cryptocurrency Taxed in Spain?
Spain’s tax authority has recently updated its guidance on cryptocurrency taxation.
Here’s a summary of the potential taxes you may encounter with crypto transactions in Spain:
- Savings Income Tax: This includes several subcategories, such as savings income, investment income, and income from business activities.
- Wealth Tax: This tax applies to your overall wealth, including the value of your cryptocurrency holdings.
- Inheritance and Donations Tax: This tax will apply if you receive crypto as an inheritance or donation.
Savings Income From Crypto
In Spain, your capital gains from cryptocurrency are considered savings income. You realise capital gain whenever you dispose of your crypto, which means it changes hands at any time. This includes:
- Selling crypto for any fiat currency such as EUR or USD
- Trading crypto for another cryptocurrency
- Spending crypto in exchange for goods and services
- Wrapping crypto
Depending on the size of your net profit and the financial year, you’ll pay taxes ranging from 19% to 28%.
Savings Income Tax Rate
The savings income tax rate in Spain is detailed as follows:
|
Profit |
Tax Rate |
|
Profits up to €6,000 |
19% |
|
Profits between €6,000 and €50,000 |
21% |
|
Profits between €50,000 and €200,000 |
23% |
|
Profits between €200,000 and €300,000 |
27% |
|
Profit above €300,000 |
28% |
The tax rate on your capital gains is progressive, which means you won’t pay the same rate on your entire gain. For instance, if you have a net capital gain of €60,000, you won’t pay a flat 23% on the whole amount. Instead, you’ll pay:
- 19% on the first €6,000
- 21% on the next €44,000
- 23% on any amount over €50,000
This structure ensures that different portions of your gain are taxed at different rates.
How Do You Calculate Your Crypto Capital Gains In Spain?
Calculating your crypto capital gains might seem tricky, but it’s straightforward once you break it down into steps. Here’s how you can do it:
Determine Your Cost Basis
Start by figuring out your cost basis. This is the amount you originally paid for your crypto. It includes the purchase price plus any extra costs related to acquiring or disposing of the crypto, such as transaction fees. If you received your crypto as a gift or through another method, use its fair market value on the day you received it.
Calculate Your Gain or Loss
To find out your capital gain, subtract your cost basis from the sale price of your crypto. If you traded or gifted your crypto, calculate your gain or loss using the fair market value on the day of the trade or gift.
Capital Gain/Loss = Sale Price – Cost Basis
If There Is Capital Gain
If the sale price exceeds your cost basis, you have enjoyed a capital gain. Therefore, you must include it in your annual personal income tax return. This is the amount you need to declare as income for the year.
If There Is Capital Loss
You have suffered a capital loss if the sale price is lower than your cost basis. However, you can offset capital losses against any capital gains in Spain.
Example:
If you earned money from other investments, you can subtract your crypto losses from those gains. If your losses exceed or have no gains to offset, you can carry the unused losses to future tax years.
These losses can be carried forward for up to four years to offset future capital gains. If you still have losses after this period, you can use up to 25% to offset other income, such as dividends or interest.
Official Cost Basis Method In Spain
When calculating your crypto capital gains in Spain, you’ll use the FIFO method, which stands for “First In, First Out” or “Primero En Entrar, Primero En Salir” in Spanish. This method assumes that the crypto tokens you bought are the ones you sell.
Example:
Eric bought 1 Bitcoin (BTC) on January 1st for €5,000 and another 1 BTC on March 1st for €6,000. If he sold 1 BTC on June 1st at €7,000, FIFO assumes you are selling the BTC you purchased on January 1st, which cost him €5,000.
Capital Gain = Sale Price – Cost Basis
Capital Gains = €7,000 – €5,000 = €2,000
Eric will report this €2,000 gain in his tax return.
By using FIFO, you ensure that your tax calculations are based on the order in which you acquired your crypto assets, making it easier to track and report.
Income Tax Rates On Crypto
Understanding income tax rates on crypto in Spain can be complex. Spanish tax law categorises crypto earnings under the general tax scale (base imponible general) for various types of income, including freelance work and rental income.
This scale includes 17 different autonomous community tax rates, adding another layer of complexity.
For crypto investments, you’ll deal with the base imponible del ahorro, which applies to savings income, investment income, and capital gains. The rates here differ from those on regular income, focusing more on gains from assets like cryptocurrencies.
Here’s an overview of income tax rates in Spain:
|
General taxable income |
Total tax rate (State + Regional) |
|
Up to 12,450 |
19% |
|
More than 12,450 up to 20,200 |
24% |
|
More than 20,200 up to 35,200 |
30% |
|
More than 35,200 up to 60,000 |
37% |
|
More than 60,000 up to 300,000 |
45% |
|
Over 300,000 |
47% |
What About Other Kinds Of Crypto Income?
In Spain, various types of crypto income are taxed differently. Here’s how some common forms of crypto income are treated under current regulations.
Staking Income
If you earn rewards from staking your crypto, this is classified as investment income. You need to report staking rewards in cell 0033 of your Income Tax Return for 2023. The amount should be recorded at its fair market value in euros on the day you receive the rewards. Unfortunately, you can’t deduct any expenses related to staking, and the income is taxed at the same rate as other savings income.
Airdrops or Referral Rewards
Airdrops and referral rewards are considered gifts rather than capital. You should report these in cell 0304 of your Income Tax Return for 2023. The taxation on airdrops and referral rewards falls under the General Taxation Scale, similar to freelance income. This means these rewards are taxed according to the general income tax rates, which can vary based on your total income.
Crypto Mining
Crypto mining is regarded as a business activity in Spain. If you mine cryptocurrencies, you must register as a freelancer (autónomo) with the business activity code 832.9, which covers other financial services. Income from mining is taxed within the General Taxation Scale, just like other business or freelance income. This includes reporting all mining income and paying taxes according to the applicable rates for business activities.
Wealth Tax On Crypto In Spain
Wealth Tax in Spain is essential for those with significant assets, including cryptocurrencies. Most regions in Spain impose this tax, and the value of your crypto holdings must be included in the calculations.
Wealth Tax rates vary by region, starting at around €700,000 in total assets. Here’s a breakdown of the rates in the different areas:
- Catalonia: Tax rates range from 0.21% to 3.48%.
- Asturias: Expect rates between 0.22% and 3%.
- Region of Murcia: Rates vary from 0.24% to 3%.
- Andalusia: Rates are between 0.20% and 2.5%, though this is set to align with Madrid’s scheme in 2023.
- Cantabria: Tax rates range from 0.24% to 3.03%.
- Community of Valencia: Expect rates between 0.25% and 3.5%.
- Balearics: Rates vary from 0.28% to 3.45%.
- Extremadura: Tax rates range from 0.30% to 3.75%.
However, Madrid is the only city in Spain that does not impose a Wealth Tax. But, if your total assets exceed €2 million, you still need to file a Wealth Tax Return for informational purposes.
Note: If your assets surpass the exemption limit, you must declare them. Include the value of your cryptocurrencies in euros based on the market price on December 31 of the tax year. This ensures that you comply with regional regulations and accurately report your wealth.
Inheritance And Gift Tax
Inheritance and Gift Tax in Spain applies to residents and non-residents who receive assets in Spain or abroad. This tax covers all kinds of assets, including cryptocurrencies, and varies depending on the amount and location of the assets.
Who Is Affected?
Spanish residents must pay Inheritance and Donations Tax on all assets they receive, whether in Spain or abroad. Non-residents are taxed only on assets in Spain or rights that can be exercised within Spain. If you inherit or receive a gift of cryptocurrencies, you must account for them in your tax filings.
Tax Base and Valuation
The net value of the assets received determines the tax base. This value is usually the asset’s market price or the most likely selling price free of encumbrances. For real estate, the reference value provided by the real estate Cadastre on the date the tax becomes due is used for valuation if the taxable event occurred after July 10, 2021.
Reporting Crypto Assets
When you inherit or receive cryptocurrencies, you must include their value in your Inheritance and Donations Tax statement (ISD). The tax rate you’ll pay depends on the assets you receive and your region of residence. Rates can vary significantly, typically ranging from 7% to 36.5%.
Regional Variations
Each Autonomous Community in Spain sets tax rates for inherited and gifted assets. Therefore, your pay rate can differ based on where you live. It’s essential to check the specific rates for your region to understand your tax obligations fully.
Tax-Free Crypto Transactions
While Spain has specific tax regulations for cryptocurrencies, there are some transactions that you can make without worrying about taxes. Here’s a look at the tax-free crypto transactions you can enjoy.
Buying Crypto
When you purchase cryptocurrencies, you do not have to pay tax at the time of acquisition. This means that buying crypto assets is free from immediate tax implications. However, remember that the tax burden will come into play when you sell or exchange these assets and realise any gains.
Holding Crypto
Simply holding onto your crypto assets does not trigger any tax obligations in Spain. You are not taxed just for owning cryptocurrencies unless your total wealth exceeds the exemption limit, and you are subject to Wealth Tax. In that case, you need to report the value of your holdings for Wealth Tax purposes, but holding itself is not taxable.
Transferring Crypto Between Your Wallets
Transferring cryptocurrencies between your wallets is also tax-free. This transaction does not involve a sale or exchange, so it doesn’t trigger any taxable events. Keep records of these transfers for reference, as they can help track and report your crypto holdings accurately.
Taxable Crypto Transactions In Spain
Need help with crypto taxes in Spain? Let’s clear things up with the taxable crypto transactions:
Selling Crypto For Fiat Currency
Selling crypto for fiat currency, such as Euros, involves converting your digital assets into traditional money. This type of transaction means you exchange your cryptocurrency for fiat currencies. In Spain, when you sell your crypto and make a profit, you need to pay tax on the capital gains.
Example:
Carlos bought a Bitcoin for €2,000, and with a 5% gas fee, his total cost basis becomes €2100. Later, he sold it for €5,000, gaining €2900. This €2,900 is taxable as savings income and must be reported on your tax return.
Swapping Crypto For Crypto
Trading crypto for crypto involves swapping one type of cryptocurrency for another. This type of transaction is common among crypto enthusiasts who want to diversify their portfolios or take advantage of market opportunities. However, in Spain, this transaction is considered a disposal, meaning you must pay tax on any capital gain from the trade.
Example:
If you originally bought Ethereum for €1,000 and later traded it for Bitcoin when the Ethereum was worth €3,000, you made a gain of €2,000. The Spanish tax office requires you to pay tax on this €2,000 gain, even though you didn’t cash out to fiat currencies.
Initial Coin Offerings (ICOs)
When you invest in an ICO (Initial Coin Offering) in Spain, understanding the tax implications is crucial. The tax treatment of tokens received through an ICO depends on the nature of your investment.
If you purchase tokens directly, the acquisition cost on your initial investment becomes the token’s basis. This means you will only be taxed on the gains when you eventually sell or dispose of these tokens, with the profit calculated as the difference between the sale price and your initial acquisition cost.
However, the tax situation changes if you invest in an ICO using an existing asset, such as another cryptocurrency. The expenditure of that existing asset is treated as a sale, which means you must report any capital gains made from the difference between the asset’s original purchase price and its value at the time of the ICO investment.
Receiving Crypto As Salary
Receiving crypto as a salary means your employer pays you in cryptocurrency instead of traditional fiat currencies.
This form of payment is becoming more common as crypto adoption grows. In Spain, when you receive your salary in crypto, it is treated like any other income and is subject to the same taxes.
Your employer needs to report these payments on the standard informational tax form covering salaries, so you must check your online work income report to ensure everything is accurate.
Example:
If your monthly salary is €2,500 but paid in Bitcoin, you must declare this €2,500 as income and pay the necessary income taxes just as you would if it were paid in euros.
Receiving Crypto In-Return Of Goods and Services
Receiving crypto in return for goods or services means a customer pays you in cryptocurrency instead of fiat currencies. This type of transaction is treated similarly to receiving traditional payments in Spain.
You must convert the value of the crypto received into its euro equivalent and issue an invoice for tax purposes. This amount will be part of your freelance income, or Rendimientos de Actividades Económicas, which you must declare in your tax return.
Example:
If you provide a service worth €500 and receive that amount in Bitcoin, you need to convert this €500 into its crypto equivalent at the time of the transaction and report it as income.
Mining Crypto
Mining crypto involves using computing power to solve complex algorithms and validate transactions on a blockchain network. When you mine cryptocurrency in Spain, the tax authorities consider it a business activity.
You must register yourself as a freelancer (autónomo) under the business activity code 832.9 (otros servicios financieros). Any income you earn from mining is subject to General Income Tax, which you need to report and pay accordingly.
However, when you sell the mined cryptocurrency, your profit is treated as a capital gain and taxed as savings income.
Example:
If you mine Bitcoin worth €2,000 and later sell it for €3,000, you’ll pay General Income Tax on the initial €2,000. The €1,000 profit from the sale is taxed as a capital gain.
Airdrops
Airdrops are a unique way to receive free crypto. They are usually distributed by a blockchain project to promote its tokens or reward users.
In Spain, the conservative approach treats airdrops as income. When you receive them, you should report the market value of the airdropped tokens as taxable income.
Moreover, subsequent selling of the airdropped token will be labelled as crypto disposal, and any profit from that will attract savings income tax.
Example:
Let’s say you receive an airdrop of 500 tokens, and each token is worth €2 at the time. You must report €1,000 as income.
Later, if you sell these tokens at an increased rate of €5 each, your total sale price stands at €2,500.
Here, you have made a profit of €1,500, which will be taxed as savings income tax.
Gifting Crypto
Gifting crypto involves transferring your digital assets to someone else without receiving anything in return. In Spain, the tax authorities view gifting crypto as an act of disposal, and you’ll need to pay Inheritance and Gift Tax on it. The amount of tax you’ll pay varies depending on the autonomous region where you live.
Gift Tax applies whether you’re a Spanish resident or a nonresident. Spanish residents pay this tax on all assets received in Spain or abroad, while nonresidents must pay it on assets and rights located in Spain. The tax base is the market value of the gifted crypto at the time of the transfer.
Example:
If you gift €5,000 worth of Ethereum to a friend, you’ll need to report this transaction and pay the Gift Tax based on the €5,000 value.
HODLing Crypto
HODLing crypto, which means holding onto your digital assets without selling, is a popular strategy among many investors in Spain. When you choose to HODL, you don’t trigger a taxable event immediately.
However, suppose your total assets, including crypto, exceed the Wealth Tax threshold in your region. In that case, you need to calculate the combined value of all your assets, including your crypto holdings, by the end of the year.
Example:
If your Bitcoin holdings are worth €200,000 and your other assets bring your total to €800,000, and the Wealth Tax threshold in your region is €700,000, you will need to pay Wealth Tax on the excess €300,000.
HODLing Crypto
HODLing crypto, which means holding onto your digital assets without selling, is a popular strategy among many investors in Spain. When you choose to HODL, you don’t trigger a taxable event immediately.
However, suppose your total assets, including crypto, exceed the Wealth Tax threshold in your region. In that case, you need to calculate the combined value of all your assets, including your crypto holdings, by the end of the year.
Example:
If your Bitcoin holdings are worth €200,000 and your other assets bring your total to €800,000, and the Wealth Tax threshold in your region is €700,000, you will need to pay Wealth Tax on the excess €300,000.
Crypto Received As Inheritance
Receiving crypto as an inheritance in Spain is a significant transaction with tax obligations. When you inherit cryptocurrency, the value of the crypto at the time of inheritance becomes the basis for taxation.
The tax rate for inherited assets, including crypto, varies depending on your autonomous community, generally ranging from 7% to 36.5%.
Example:
Let’s assume you inherit Bitcoin worth €50,000; depending on where you live, the tax you owe could range from €3,500 to €18,250.
Profit/Income From Dealing In Crypto Derivatives
If you’re trading crypto derivatives in Spain, such as futures, financial options, or CFDs, it’s essential to understand the tax implications. Like stocks and ETFs, your profits from trading these derivatives are considered savings base patrimonial gains. You must declare these profits on your income tax return.
The tax rates you’ll pay depend on the amount of net profit you earn from your crypto derivatives trading:
- 19% for net profits up to €6,000.
- 21% for net profits between €6,000 and €60,000.
- 23% for net profits exceeding €60,000.
These investments’ interest, dividends, or profit-sharing are taxed as capital income. Spain’s personal income tax (IRPF) system is dual, categorising income into general and savings, each with its tax rates.
Taxes on DeFi Activities In Spain
In Spain, transactions involving DeFi and LP tokens are considered part of the cryptocurrency’s acquisition or sale cost. The tax paid depends on whether it is supposed to be a capital gain or additional income. Here’s how different DeFi transactions are taxed in Spain:
Staking Rewards
If you earn crypto through staking, treat these rewards as income. Even though Agencia Tributaria hasn’t released specific guidance on this, the conservative approach is to report staking rewards as income when received. Later, if you sell or dispose of these tokens, you must pay capital gains tax on any profit.
Providing Liquidity In Liquidity Pools
When you provide liquidity to a liquidity pool, the income you earn from this activity is taxable. Report these earnings as income on your tax return. The tax rate will align with Spain’s income tax rules for such earnings.
Lending Crypto
Simply lending crypto is not a taxable event in itself. However, the interest you earn from lending your tokens is taxable. Ensure you report this interest as part of your income on your tax return.
Yield Farming
Yield farming involves earning returns by participating in DeFi protocols, and these earnings are taxable as income. To comply with tax regulations, report the profits from yield farming on your income tax return.
Wrapping Token
Wrapping tokens—converting them into a different format—is taxable. You must pay capital gains tax on any profit from the wrapped tokens.
Borrowing Crypto
Borrowing crypto does not trigger a tax event. You do not need to pay taxes simply to borrow tokens, though be mindful of any interest income or other taxable activities related to your borrowing.
How To Save Crypto Taxes In Spain?
Saving on crypto taxes in Spain involves strategic planning and understanding available deductions. Here’s how you can potentially reduce your tax liability:
Donate Cryptocurrency
Donating cryptocurrency to charities can provide tax benefits, but only if donations are made to organisations that meet specific criteria. To be eligible for a tax deduction in Spain, the charity must be registered and have one of the following legal structures:
- Foundation (‘Fundación’): The charity should be officially recognised as a foundation in Spain.
- Association (‘Asociación’): The association must have either the special ‘declaración de utilidad pública’ certificate or be registered in the ‘Registro de ONGD’ of Spain’s development agency, AECID.
Ensure that your chosen charity meets these requirements to qualify for tax deductions. Donations to qualifying organisations can reduce your taxable income based on the fair market value of the crypto donated. Keep detailed records of the donation and the charity’s registration status to support your tax deduction claim.
Claim Deductions
Consider claiming deductions for various expenses to reduce your taxable income from crypto transactions.
Transaction Fees:
Keep detailed records of all transaction-related costs, including gas fees, brokerage fees, and any other associated expenses. These fees can be deducted from your taxable gains, which helps lower your overall taxable income.
By subtracting these costs from your gross profit, you ensure that only your net gains are subject to taxation. Accurate documentation of these expenses is crucial for maximising your deductions.
Interest Expenses on Crypto Borrowing:
If you have borrowed crypto and incurred interest expenses, you can also claim these costs as deductions. Interest expenses on loans used to acquire or hold cryptocurrency can be subtracted from your taxable income, effectively reducing your tax liability.
Maintaining thorough records of all borrowing agreements and interest payments is essential to support your deduction claims.
Offset Crypto Losses With Gains
You can offset crypto capital losses against other capital gains from crypto or non-crypto assets. The maximum loss you can set off in a given year is limited to 25% of your total capital gains.
If your losses exceed this limit, you can carry the remaining crypto capital losses to the next financial year. This carry-forward option is available for up to four financial years.
Correctly applying these losses can reduce your taxable gains and lower your overall tax liability.
Spain Tax Deadline
In Spain, the tax year aligns with the calendar year, running from January 1st to December 31st. You need to file your Spanish income tax return for the previous year, starting each year in early April. The deadline to submit your tax return is June 30th.
For example, if you need to file your tax return for the 2024 tax year, you must complete it by June 30, 2025. Keeping track of these deadlines helps you stay compliant and avoid potential penalties. Mark your calendar and gather all necessary documents well before the due date.
How To File Your Crypto Taxes In Spain?
Filing your crypto tax in Spain can seem daunting, but understanding the process can simplify it. Here’s a list of tax forms (modelo) which you must file to report your crypto transactions in Spain:
Modelo 100 - Personal Income Tax
As a Spanish tax resident, you need to complete Modelo 100 to declare your income and pay taxes on any profits from cryptocurrency transactions.
You can calculate your crypto tax liability using various tools or apps designed for this purpose, and filing is straightforward via AEAT’s Renta Online platform.
Here’s a guide on how to navigate the different sections of your tax return:
Income from Economic Activities
If you earn income from crypto-related economic activities, such as mining rewards, you must report this in Section D1: Rendimientos de actividades económicas.
Under Actividades económicas en estimación directa, choose BO6 from Box 0166, then enter your income in Box 0178 labelled otros ingresos. This section covers earnings from economic activities directly related to your crypto operations.
Investment Income
For investment income, like staking rewards, you must fill out Section B: Rendimientos del capital mobiliario.
Navigate to Rendimientos del capital mobiliario a integrar en la base imponible del ahorro and then to Box 0031.
Enter the total amount of your capital income into the Rendimientos integro box. This section captures income from investments, including returns from staking.
Savings Income
Regarding savings income from selling or trading crypto, head to Section F2: Ganancias y pérdidas patrimoniales. Under Monedas virtuales, select Box 1804 and fill in the details for each crypto disposal throughout the financial year.
If you have numerous transactions, consider contacting the tax office. Instead of listing each transaction individually, you can submit an attachment summarising your total gains or losses.
Modelo 714 - Wealth Tax
Modelo 714 is the Spanish tax form used to report your worldwide assets if their net value exceeds €700,000. Known as the “Impuesto sobre el Patrimonio,” this form is essential for declaring high-value assets and ensuring compliance with Spain’s Wealth Tax regulations.
Assets to Declare
You need to include various types of assets in Modelo 714, including:
- Real Estate: Report all properties you own, including residential and commercial ones.
- Bank Deposits and Investments: Include all savings accounts, stocks, bonds, and other financial investments.
- Crypto Assets: Declare the value of all cryptocurrencies you hold.
- Luxury Assets: List high-value items such as cars, yachts, and jewellery.
- Art Objects and Antiques: Report any significant art pieces or antiques in your collection.
- Insurances: Include the value of life insurance policies with a surrender value.
Modelo 720 - Declaration Of Assets Held In Foreign Exchanges
Modelo 720 is a tax form in Spain that is used to report assets held abroad. You must file this form if you own assets worth more than €50,000 outside Spain, such as properties, bank accounts, deposits, savings, shares, or life insurance.
The purpose of Modelo 720 is to ensure that all your foreign holdings are accounted for in your Wealth Tax declaration.
Recently, the Spanish treasury clarified that Modelo 720 does not apply to cryptocurrencies.
However, you must submit this form if your overseas assets exceed €50,000. Aligning Modelo 720 with your Wealth Tax declaration is crucial for accurate reporting and compliance with Spanish tax regulations.
Modelo 721 - Declaration Of Crypto Held Outside Spain
Modelo 721 is a tax declaration form introduced as part of the Spanish Tax Laws reform in July 2021, focusing on anti-fraud measures. This form explicitly targets cryptocurrencies held abroad.
If your crypto portfolio’s value exceeds €50,000, you must file Modelo 721 between January 1 and March 31 each year. The requirement first applies to the 2024 tax year, meaning the initial submission will be due in 2025.
To complete Modelo 721, you need to determine the value of your cryptocurrency based on the average price as of December 31 for each financial year.
If your crypto holdings exceeded €50,000 during the year but were below this threshold on December 31, you must include details about when your portfolio fell below this amount.
When filing Modelo 721, be aware of deadlines and accuracy. Missing the submission deadline results in a €200 penalty, and incorrect submissions will incur a €150 penalty.
Before filing, ensure you have all the necessary information. Also, correctly value your assets to comply with Spanish tax regulations and avoid any penalties.
Modelo 172 & 173 - Declaration Of Crypto Held By Corporates
Modelo 172 and Modelo 173 are Spanish tax forms designed for companies operating in the cryptocurrency sector, including crypto exchanges, wallet providers, and those offering services to safeguard private cryptographic keys on behalf of third parties.
Modelo 172 requires companies and individuals to report their virtual currency balances and those held by their customers. This form helps tax authorities monitor and assess these businesses’ cryptocurrency holdings, ensuring transparency and regulation compliance.
Modelo 173, on the other hand, obliges companies to report all transactions they conduct, whether within Spain or internationally. This includes transactions involving cryptocurrencies, such as trades, transfers, and other financial activities. By capturing detailed transaction information, this form aids in tracking the flow of crypto assets and preventing potential misuse or evasion.
Filing both forms accurately is crucial for companies in the crypto space to meet regulatory requirements and maintain compliance with Spanish tax laws. It helps ensure that all cryptocurrency-related activities are appropriately documented and reported, reducing the risk of legal issues or penalties.
Which Records Do I Need To Submit When Filing Crypto Taxes In Spain?
Maintaining detailed records of cryptocurrency transactions is essential to ensure accurate crypto tax filing. Here’s what you need to keep track of:
- Type of Cryptocurrency: Document the specific type of cryptocurrency involved in each transaction.
- Fair Market Value at Receipt: Record the fair market value of your crypto when you receive it. This helps determine your initial cost basis.
- Fair Market Value at Disposal: Note the fair market value of your crypto when you dispose of it, whether through sale or exchange. This is crucial for calculating any capital gains or losses.
- Date of Receipt: Keep the date when you initially received the cryptocurrency. This is necessary for calculating holding periods and determining the correct tax treatment.
- Date of Disposal: Record when you disposed of the cryptocurrency. This helps align the transaction with the correct tax year.
- Other Party Involved: Include details about the other party in the transaction, even if it’s just their wallet address. This adds transparency to your records.
Remember to convert all transaction values to Euros, even if your transactions were in another currency, like US Dollars. Accurate conversion ensures that your tax report aligns with Spanish regulations.
Stay informed about regional regulations and keep your records current to avoid surprises at tax time. Maintain these records for at least five years. Doing so will enable you to file taxes with an accurate record of your cryptocurrency activities.
How Can KoinX Help With Your Calculation Of Crypto Taxes?
Dealing with crypto taxes in Spain can feel like navigating a labyrinth of complex regulations and paperwork. If you’re overwhelmed by the intricacies of tracking your transactions, calculating your gains and losses, and ensuring compliance with Spanish tax laws, KoinX is here to help.
KoinX is an automated crypto tax reporting platform designed to ease the burden of manual calculation of taxes. It meticulously gathers your transaction data, processes it according to Spanish tax regulations, and generates a compliant tax report.
Let’s check how KoinX stands out as one of the best crypto tax reporting platforms:
- Integration From Over 270 Platforms: KoinX connects with a vast array of exchanges and wallets, automatically fetching your transaction history. This eliminates the need for manual data entry and reduces the risk of errors.
- Automatic Transaction Import: Say goodbye to tedious spreadsheets. KoinX imports your transactions seamlessly, ensuring all data is complete and accurate for tax calculations.
- Unified Portfolio Overview: KoinX offers a comprehensive view of your crypto holdings in one place. This unified overview helps you track your investments and understand potential tax implications.
- Wide Range of Supported Cryptocurrencies: Whether you hold a diverse range of digital assets or are just starting, KoinX supports numerous cryptocurrencies, ensuring all your assets are accounted for.
- Auto-Classification Of Transactions: Spanish tax laws can be complex. KoinX’s auto-classification feature categorises transactions according to Spanish tax regulations, such as buying, selling, and staking, ensuring accurate tax treatment.
- Tax Report Export: KoinX generates a tax report formatted specifically for Spanish tax authorities once your data is categorised and calculated. Once you export this report, you can simplify your filing process.
So, if you want reliable crypto tax computing software to calculate your crypto taxes in Spain, sign up for KoinX today!
Conclusion
Dealing with crypto taxes in Spain might initially seem overwhelming, but you can manage them effectively with the correct information and preparation. Understanding your tax obligations, reporting requirements, and available deductions will help you stay compliant and optimise your tax situation.
Moreover, to ease up your crypto tax calculations in Spain, register on KoinX today!
Frequently Asked Questions
Is It Mandatory To Report Crypto Transactions In Spain?
Yes, it is mandatory to report crypto transactions in Spain. You must report all capital gains and income from cryptocurrencies or other crypto assets, including any gifts you receive.
The only exception is outlined in Article 96 of the Spanish Personal Income Tax Law. According to this article, if your total income from work, capital, or economic activities, as well as your capital gains for the tax year, is below €1,000, you are not required to file a tax return.
What If I Don’t Declare Crypto Income While Filing Income Tax?
In Spain, penalties for tax violations, whether accidental or intentional, can be severe. Fines may reach up to 150% of the undeclared amounts. Spanish residents who attempt to evade taxes exceeding €120,000 could face imprisonment. Therefore, it is crucial to report your crypto taxes thoroughly and accurately.
Is It Necessary To Declare My Crypto Holdings To Tax Authorities?
You must declare all crypto holdings exceeding €50,000 held abroad using the new Modelo 721 form, not Modelo 720 as previously thought. Effective 1 January 2023, this form specifically reports foreign crypto assets. Additionally, report your crypto holdings for Wealth Tax if your total worldwide net worth surpasses €700,000.
What If I Don’t Submit My Income Tax On Time?
Failing to submit your income tax on time in Spain results in penalties. If you’re up to 3 months late, expect a 5% fine on the tax due. Delays between 3 to 6 months increase the penalty to 10%, and 6 to 12 months bring a 15% fine. Over a year late incurs a 20% penalty plus an additional 5% interest on the overdue amount. Timely filing helps avoid these costly penalties.
