Spain has a new box in the Income Tax Return to include cryptocurrencies, so it is important to know how to declare them and who has to pay for them.
Around seven million taxpayers will have to Include cryptocurrencies in your tax returns for the first time in history. This year, a new bracket has also been created, the sixth, for those annual incomes exceeding 300.000 euros, which will have a tax rate of 47%.
For the first time, cryptocurrencies will have to be included in the tax returns of more than 7 million Spaniards. This year, the Income Tax return has a new box, box 46, specifically for identifying cryptocurrency balances.
But is it necessary to include cryptocurrencies in the personal income tax return? Yes, but only those who have sold or exchanged them throughout 2021 will have to do so, and have obtained profits of more than 1.000 euros with them. If you have generated losses, it will not be necessary to declare them, although experts advise doing so, since they could be offset in the future.
What happens if we do not include them in the declaration? Based on what is described in the Annual Tax and Customs Control Plan for 2021, the possible penalty for tax debt can reach up to 150% of the value.
How are cryptocurrencies taxed in Spain?
Since they are required to pay taxes on profits, cryptocurrencies are also divided into several brackets. The first, up to 6.000 euros, They only pay 19%; 6.001 to 50.000euros They pay 21%; since 50.001 to 200.000euros, 23% must be paid and, from 200.001 Euros, the amount will be 26%.
What if we have lost money? If we have lost money by selling the cryptocurrencies, we can offset this with profits from other transactions up to 25% of the capital return.
How do we include cryptocurrencies in the income tax return?
Cryptocurrencies must be included in the generic section “Other assets and rights of economic content”, in the draft of the Wealth Tax (IP, model D-714) declaration, in box 46, entitled “Balances in virtual currencies".
In this box, we will have to fill in the fields: percentage of ownership, denomination or type of virtual currency, number of units and value in euros.
As we have already explained, you only have to declare when a situation has occurred. effective sale or profits have been generated, whether through sales or returns, regardless of the means by which these profits have been obtained.
How does cryptocurrency regulation work in Spain?
For now, in Spain there is no specific regulation for cryptocurrencies, but they are integrated within the same tax treatment as capital gains and lossesThis tax treatment also includes losses and profits obtained from the purchase or sale of NFTs.
Furthermore, cryptocurrency mining should be declared as an economic activity, so the amounts received must be declared as income derived from the activity.
In the case of NFTs, companies that manage this type of asset must report this activity to the authorities.
The deadline to file the Personal Income Tax (IRPF) and Wealth Tax return is June 30th, 2022.
If you have questions about how to include cryptocurrencies in your income tax return, we invite you to consult the taxation course and taxes on Bitcoin and other cryptocurrencies, where you will find all the information you need on this topic.
