The 2024 Income Tax Campaign is approaching rapidly, starting this next April 2And this year, more than ever, the Treasury will focus its attention on cryptocurrencies. You may think this doesn't affect you, or you may be unsure about how to proceed. But the reality is that cryptocurrencies are no longer an anecdote in the tax world. Let's unravel together how to approach this situation to avoid unpleasant surprises.
Who should declare cryptocurrencies and who shouldn't?
First, let's clear up the big question: Is everyone who owns cryptocurrencies required to declare them? Not necessarily. The Treasury only requires people who have sold or exchanged cryptocurrencies during 2024 to declare those transactions. This means that even if you haven't earned a single euro cent in profit, you'll have to include these transactions in your tax return.
On the other hand, if you simply bought cryptocurrencies to store them in your digital wallet, which in crypto jargon we know as "holde"You can rest assured, because in this case you are not obliged to declare them.
What exactly does it mean to declare cryptocurrencies?
To clearly understand what it means to declare cryptocurrencies, Let's take a simple example. Suppose you initially purchased Bitcoin worth €10.000 and, after a while, decided to exchange it for Ethereum when that same Bitcoin was worth €15.000. Although this transaction didn't involve a direct conversion to euros, the Treasury interprets this exchange as a tax-relevant transaction called a swap, which generates a capital gain of €5.000. Therefore, you will owe tax on this gain.
The key is in the method FIFO (First In, First Out), which is the system required by the Tax Agency to declare these transactions. This method means that the first cryptocurrencies purchased will be considered the first to be sold or exchanged. What exactly does this mean for your tax return? Simple: the initial value at which you purchased the cryptocurrencies will be the one you determine as the basis for calculating your capital gain or loss.
The step-by-step procedure for declaring cryptocurrencies
How to do this correctly? You must include all operations in the specific section called “Capital gains and losses arising from transfers of other assets” within your income tax return, specifically in the savings tax base. To do so, you'll need to keep a clear and organized record of all your cryptocurrency transactions, from purchase to exchange or sale, including exact dates and precise values.
In short, the calculation is relatively simple once you understand the mechanism: subtract the initial price you paid for those cryptocurrencies (acquisition value) from the value obtained from the sale or exchange (transfer value). If the result is positive, you will have made a taxable profit; if it's negative, you will have a loss that could be offset against other profits.
WorldCoin and biometric scanning: How are these tokens taxed?
But things can get a little more complicated when it comes to WorldCoin, a biometric cryptocurrency that has captured the attention (and irises) of many people in Spanish shopping malls in recent years, offering tokens in exchange for eye scans.
Between 2022 and early 2024, numerous users participated in this unusual initiative, unaware of the potential tax impact of receiving these "free" digital assets. Estate, however, does not see these tokens as simple innocent gifts, but as capital gains not derived from a transmission.
What does this mean in practice? These tokens are obtained in exchange for iris scanning during 2024 They must be declared as income on your tax return. The Treasury equates this income to other similar income, such as prizes, raffles, or airdrops, which must be taxed under the general tax base. And here's another important detail: if you subsequently sell those tokens for a lower value than the original, that loss can only be offset within the savings tax base. That is, you can't offset it with taxes already paid under the general tax base.
What happened to WorldCoin in Spain?
During March 2024, the Spanish Data Protection Agency ordered precautionary measures that prevented WorldCoin continue using and storing biometric data in Spain, culminating in the mandatory deletion of all iris scans they had collected in December. This event set an important precedent in terms of privacy and cryptocurrency regulations in Spain.
This case has put many investors and casual users on alert, who are now aware that cryptocurrencies not only have tax implications, but also regulatory ones that can directly affect how they are managed and used.
The fiscal future of the crypto world
With each passing year, the Treasury Department shows increasing interest and closer scrutiny of cryptocurrencies. The logic is simple: as more people enter this market and digital assets become more economically significant, they receive more scrutiny from tax authorities.
The inevitable question is: what can we expect in the immediate future? Everything indicates that tax requirements will become increasingly clear, detailed, and likely stricter. This represents a challenge, but also an opportunity for those who know how to adapt, keep their accounts clear, and anticipate these fiscal changes.
Furthermore, we cannot forget the international context, where organizations such as the G20 and international financial institutions are already discussing how to regulate the crypto market globally. Spain will not be immune to these changes, and regulations are likely to gradually become more consistent with those of the rest of Europe and the world.
What can you do right now?
The first step is obvious: get your operations in order. Keep meticulous records of all your transactions, dates, and values, to simplify your reporting. Then, take advantage of reliable and secure tools to manage your digital assets.
This is where it comes in Bit2MeBit2Me, a user-friendly, simple, and secure platform for managing your cryptocurrencies. In addition to allowing you to efficiently monitor your investments, BitXNUMXMe offers up-to-date information on tax and regulatory changes.
Now that you know the landscape and how to deal with it, are you ready to get your crypto in order and sleep soundly in 2024?
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
