In Spain, It is mandatory for citizens to declare their cryptocurrencies to the TreasuryThis translates into several taxes and strict deadlines to comply with for those who own Bitcoin, Ethereum, Dogecoin or any otherThese assets must be taxed through personal income tax. or personal income tax, the Wealth Tax and Form 721.
Due to the multiplicity of paths established by the legal tax frameworkThis payment can represent a significant burden for users, generating complications, doubts and, in many cases, a huge headache due to not knowing how to do the entire process correctly.
Current regulations and Treasury technology
The current regulations on Taxes on cryptocurrencies in Spain establishes that taxpayers must report their profits and losses generated by digital assets in their personal income tax.
LINK CARD AND EARNThe amount of money or tax rates applied to these earnings range from 19% and 23%, depending on the amount obtained from the digital assets. Taxpayers are also required to declare their cryptocurrency holdings in the Wealth Tax, and if these exceed certain limits in euros. On the other hand, these assets abroad must be reported with the Form 721 if the value of the same exceeds 50.000 euros.
The Treasury has stepped up its oversight to prevent confusion and tax evasion related to cryptocurrencies. It has done so by using advanced technology to track transactions on blockchains. Therefore, if these tax obligations are not met, penalties can exceed €5.000, in addition to surcharges where applicable.
In response to this situation, various legal strategies have emerged which, without violating Spanish tax laws, allows to mitigate this tax burden with regard to digital assets.
Keys to paying less taxes on cryptocurrencies
Ante the obligation to declare profits obtained with cryptocurrencies, tax economist and digital asset expert José Antonio Bravo, suggests various strategies that are key to reducing your tax burden without having to sell your crypto assets.
Between them They highlight the most used option by taxpayers and that is to request loans using Bitcoin or other cryptocurrencies as collateral. Collateral against the amount requested. The tax lawyer explained that providing the asset as collateral for a loan doesn't generate a taxable event as long as the collateral isn't liquidated. By doing this, it's possible to obtain liquidity without disposing of the investment.
It also mentions making use of peer-to-peer or P2P exchanges, which makes it difficult for the Treasury to monitor digital assets. Bravo points out that the transactions carried out through exchanges cannot be traced by the Tax Agency.
BUY BITCOINFinally, Bravo talks about the possibility of purchasing gift cards with Bitcoin or other cryptocurrencies. This is a practical and legal option offered by specialized providers. However, it is recommended not to overuse this method because repeated use could raise suspicions of activities that could be linked to money laundering: "These strategies can optimize fiscal management within the framework of la legality, although they require moderation to avoid problems with the authorities”, He said.
Self-custody as the best key strategy
Self-custody continues to be a valuable tool for cryptocurrency users. It is a practice through which users can save the private keys that allow access to their cryptocurrencies in a personal wallet, which can be a physical or hardware wallet or a digital or software wallet.
According to Bravo, This allows for economic sovereignty and a certain level of non-confiscability. He also suggests complementing this with P2P purchases, since it would be completely outside the scope of the Treasury. However, he mentions the variable of traceability associated with "know your customer" procedures. KYC protocols on exchanges may limit these benefits.
On the other hand, the tax lawyer makes a recommendation to those who plan to convert their cryptocurrencies into fiat money in the short or medium term and it is to combine exchange purchases with self-custody. This would facilitate the process, although it would entail greater exposure to oversight by the Treasury.
Change your tax domicile to another country
Some Spaniards resort to change your tax domicile abroad to reduce your tax burden. In this line he mentions Andorra, country that taxes capital gains To 10% a rate considerably lower than in Spain. However, he points out some drawbacks linked to this plan, such as the high price of real estate leasing and the requirements of Andorran banks when it comes to banking the results.
In the case of Portugal makes known that this nation exempts from taxation profits held for more than one year, An invaluable advantage for long-term investors, although not as valid for trading, which is taxed at high rates.
For those people who are considering a change of tax residence with a view to minimizing your tax payments, Bravo advises that they should first thoroughly study the country's taxation to avoid surprises and recommends, if possible, hire a specialized tax advisor.
BUY ETHEREUMThe process for effective tax transfer outside Spain to another country includes spend at least 183 days In it, register in the municipal registry and the consular census, and obtain a certificate of tax residency from the authorities of that state. This planning, he indicated, seeks to ensure that the Treasury recognizes the change, thus avoiding legal conflicts.
Be careful with the strategy used
While It is possible to apply strategies to reduce tax payments on cryptocurrencies In Spain, these options have their limitations. As for Bitcoin-backed loans, they only work if the asset isn't sold.
If it is about exchanges between individuals (P2P) and gift cards, they lose their character of discretion when used frequently. Self-custody in wallets allows for greater control, but does not guarantee traceability.
Finally, it is raised the option to move to other countries, Although tax benefits are possible, they often involve high living costs, banking requirements that are not always advantageous, or other issues that each person must take this into account personally.
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On the other hand, The Tax Agency has increasingly advanced tools To track movements, it maintains strong pressure on cryptocurrency users and contemplates associated sanctions that reinforce the importance of complying with regulations or carefully planning tax strategies. In addition, in Spain, cryptocurrency taxation involves various taxes and a demanding schedule. Therefore, when looking for alternatives, it is essential to optimize strategies without exceeding legal limits, which requires acting with information, caution and responsibility.
