One of the most important features of the cryptocurrency and NFT market is its current deregulation. However, it is expected that in 2024 the European Union will begin to apply the Proposal for the Regulation of Cryptoactive Markets and in 2022due to the enormous growth that these types of transactions have had, one of the Treasury’s objectives will be to monitor more closely that they are taxed correctly in the income statement.
This greater control could have consequences in immediate investment and is that 30% of Spaniards would stop investing in crypto assets as a result of advances in regularizationas reflected in the first Report on the Income Statement and Spanish Tax Policy carried out by TaxScouts, the online platform that simplifies tax filing.
In this same survey, other data corresponding to the cryptocurrency and NFT sector have also been obtained and, despite the fact that approximately 4.4 million Spaniards have invested or actively invest in cryptocurrencies, more than half of them (54%) do not take them into account when making their tax return and 15% of them would like to include them in their tax return, but do not know how to do it due to lack of clarity in the legislation. In addition, 56% of Spaniards believe that cryptocurrencies should be declared in the country where the investor is located, compared to 21.5% who would choose to do so in the place from which the transaction is made. Given this context, TaxScouts tax advisors remind Spaniards of the main keys to take into account in relation to cryptocurrencies for the 2022 income tax return campaign.
- The purchase of cryptocurrencies does not imply the obligation to declare them in the income. They should only be declared when they are transmitted, or if they are held in a virtual wallet that generates interest or income. If the cryptocurrencies do not generate income or no movement is made, there is no need to pay taxes, since there are no profits or losses.
- Cryptocurrency transmission or exchange operations must be included in box 389 of the income tax return. In the 2021 income statement, whose campaign begins this April 6, the profits or losses obtained from the sale of cryptocurrencies are declared from January 1 to December 31, 2021, so TaxScouts recommends having a list of the operations carried out with cryptocurrencies to know what is the amount to declare. They must go in the section ‘other capital gains to be included in the tax base of savings’.
- The yields obtained by staking, farm yieldor the interests of virtual wallets, are declared in the section on income from movable capital.
- Losses on the sale of cryptocurrencies may be compensated up to 25%. If the sale of cryptocurrencies results in a loss, these are compensated with the profits derived from other transmissions, and if the overall result is a loss, up to 25% can be compensated with the profits from the capital yields.
- Cryptocurrency mining involves registering as a freelancer. To mine cryptocurrencies is to provide the processing power of the computer, helping to perform calculations and verifying digital currency transactions. As it is an economic activity, even if it is paid in cryptocurrencies, it is mandatory to register as self-employed and comply with the obligations that apply to this type of worker.
- It is recommended to present form 720 in the event that the value of the cryptocurrencies (or the sum of cryptocurrencies with funds or securities deposited in financial entities located abroad) exceeds 50,000 euros. Although it is only an informative model, and its application to cryptocurrencies is not clear, TaxScouts tax advisors recommend submitting it, since the penalties for not doing so are high. The deadline for submitting the model for the year 2021 is from January 1 to March 31, 2022.
- In the case of being obliged to declare the wealth tax, the value of the cryptocurrencies must be included at the time of the tax declaration and paid according to the applicable rate. This tax has a minimum exempt from 500,000 euros (it changes by autonomous community), which means that you do not have to present it unless you have a higher net worth. TaxScouts recommends consulting the tax regulations in the autonomous community in which you reside, since the exempt minimums change and there are bonuses that reach 100%.
Jaume Suñol, General Manager of TaxScouts in Spain advises: “In Spain we still lack a specific legal framework that regulates the cryptocurrency market, but investing in this type of asset does have very definite tax consequences. It is important that Spaniards who have invested in these types of assets take them into account when filing their income tax return, as they could incur penalties if they are not declared correctly or if this activity has not been carried out properly. ”.