In the European Union, legislation has been passed new cryptoasset regulations. This innovative standard promotes Consider cryptocurrencies as capital that is declared in taxesSooner or later it was bound to happen. Many businesses, purchases, payments, and loans are being made with cryptocurrencies. And there's no denying that Bitcoin is the main protagonist of this economic activity that involves digital currencies.By early 2025, the bitcoin price It ranges from $60.000 to $83.000, but in December 2024 it surpassed $100. It's the most important cryptocurrency!
Due to its very high value, Bitcoin is in the sights of the Tax Agency. In Spain, it has gained considerable popularity and is a digital currency that is often held as an asset, always with the expectation that its value will rise. However, its volatility also makes it sold in the markets due to speculation about the rise and fall of its price. All of this has made this crypto a capital in constant motion and is now a taxable item.
Bitcoin and other cryptocurrencies in the Income Tax Return
How are cryptocurrencies declared? Digital currencies have a double condition: sometimes they are considered as a good that is acquired, but they are also classified as a capital with which a service or product is paid forThis dual consideration tends to confuse tax filers. In this regard, some provisions of the law on taxes and reporting of cryptocurrencies, as well as other digital assets, should be clarified.
- Bitcoins are not declared if they are purchased in euros and kept.When Bitcoins are purchased and held in a crypto wallet, the virtual currencies are considered objects or goods for which payment is made.
- It is specified that cryptocurrencies are only declared when a taxpayer, during the year 2004, had made sales or exchange operations with cryptocurrencies.
- If you buy cryptos like Ethereum, or other cryptos other than BTC, and pay with Bitcoins, then you must declare as a paymentThere is no such thing as cryptocurrency exchange, as Bitcoin is now considered a digital asset used to pay for products, objects, or services.
Bitcoins have a peculiarity that cannot be ignored: the instability of its value. Therefore, if they increased or decreased in value, it implies that they are you must report that gain or loss. That is how The value of Bitcoin is not declared when it is acquired, but the subsequent variation in its price is declared.Any increase in the price of this cryptocurrency constitutes an increase in assets, which must be declared to the tax authorities.
Cryptocurrencies, and especially Bitcoin, are interpreted analogously to an interest gain. Tax calculation includes the variation in the price of these digital assets over timeAnd in the case of BTC, this variation is very significant! For example, in September 2024, the average Bitcoin price was $56.000, but in November, it reached $76.000. That $20 difference must be declared.
Bitcoins and the banking system
The recent European regulation on cryptocurrencies orders exchange pages (Coinbase, Binance, Kraken, Bithumb, etc.) to give information on the holding and movement of cryptocurrenciesThis provision is mandatory, as cryptocurrencies like Bitcoin have not yet been fully integrated into banking systems. For this reason, for several years there were people who bought cryptocurrencies to evade taxes; but this situation has changed. In the case of the European Union, and in other groups of nations on the planet, drafted laws for the supervision and payment of taxes related to cryptocurrencies.
Usually, the Inspection of assets and capital was carried out by supervising the bank accounts of taxpayersas well as a appraisal of your properties. Now, this check is extends to cryptocurrencies, which are a combination of "capital" and "property." Cryptocurrencies are declared for tax purposes when they are used to make payments (as if they were conventional money). They also pay taxes when they generate capital gains due to an increase in their value, as is the case with real estate or other properties. All of these facets of cryptocurrencies are complex. Therefore, Tax laws have had to be adapted to contemplate the abstract and volatile cryptocurrency world.
Mistakes to avoid when declaring Bitcoins on tax forms
The fines exceed 20 thousand euros! So the best thing is not to make mistakes in crypto statementsFor this reason, we've compiled the main mistakes to avoid when declaring Bitcoins to the Tax Agency.
- Not declaring the Bitcoins you own. Error! They must always be mentioned, with the caveat that they are not taxed if they have only been acquired (the value at which they were acquired is not declared, but their increase in value is).
- Another mistake is not declaring cryptocurrencies because they are not expressed in euros. Typically, the crypto market uses the US dollar as a reference. However, this is no excuse: the value of cryptocurrencies must be expressed in euros, performing the proper mathematical conversion between dollars and euros.
- It should be mentioned how long have cryptocurrencies been heldDepending on the amount of Bitcoins or satoshis held, tax exemptions apply. However, all Bitcoins held for more than a year are taxed.
- Always declare cryptocurrency exchangesIf, for example, a BTC exchange was made for Ethereum, then that transaction must be reported, paying tax on the resulting value of the exchange.
It goes without saying that citizens must be responsible and not evade taxes by using cryptocurrencies. These digital currencies are increasingly being accepted in commerce, as well as in banking systems and government institutions. cryptocurrency capital is realIs a equity value that must be declared on taxesThe new tax laws recognize this.
