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How to pay cryptocurrencies in the 2022 income statement

In just under 15 days, on April 6, 2022, a new income campaign starts. Of course, for now, only for those who do it online. For those who choose by phone or directly in person, they will have to wait a little longer. Specifically, until May 5 and June, respectively. But this year is full of news, also included for those who have cryptocurrencies in their possession. And what is that good news?

We may know who should file the income tax return, but what we may not know in greater depth are the novelties that this year brings. News that mainly go through greater control by the Tax Agency over these virtual currencies. This translates into measures aimed at prevention, evasion and tax fraud.

Another of the great changes this year -after the controversial debate that has been generated- is that it is not necessary to make the Informative Declaration of Assets Abroad, the famous model 720, as confirmed by the treasury. Something that, however, could change from next year with what some experts have already baptized as model 721, which would translate into an autonomous information obligation on cryptocurrencies.

And, on a smaller scale, introduces a small change in the Wealth Tax return model (IP) published by Treasury. Until now, any person, holder of cryptocurrencies, who had to declare this tax, had to check the box for ‘Other Assets and Rights’; however, from now on, there will be a specific section for virtual currencies.

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As we all know, the Treasury requires cryptocurrencies to be declared, since they are considered capital gains. Yes indeed, they are only declared in case profits are obtained, regardless of how much it is. If, on the contrary, the result is negative, that is, there are losses with the transactional movements made with the cryptocurrencies, there is no obligation to declare it. The truth is that although it is not mandatory to declare in case of loss, it is recommended to do so. Why? Because if profits are generated in the coming years, it is compensated with the reduction of the tax base in the income statement.

Therefore, all those people who obtain income derived from operations with cryptocurrencies must comply with the corresponding tax obligations. In these situations, there two types of taxes for which you can get taxed:

1 – Personal income tax

In the income tax, it is necessary to declare for the profits obtained from any transaction carried out with cryptocurrencies, either by the generation of income and interest, the transmission or the sale of crypto. About income tax, Different tax rates will be applied depending on the profit achieved:

  • From 0 to 6,000 euros, 19%
  • From 6,001 to 44,000 euros, 21%
  • From 44,001 to 200,000 euros, 23%
  • More than 200,000 euros, 26%

2 – Wealth Taxes (IP)

In this case, it is necessary to declare when the holder has assets of more than 2 million euros, regardless of the amount of cryptocurrencies he has.

The transmission is another of the assumptions for which it has to be declared. In this case, it is taxed both in personal income tax and in inheritance and donation tax. Inheritance and gift tax is a tax managed by the Autonomous Communities, who can apply rebates to reduce the fee as depending, among other factors, on the degree of kinship. In Madrid, for example, for a donation of cryptocurrencies from parents to children, only a 1% fee would be paid in this tax.

What’s more, receiving cryptocurrencies as a gift or inheritance is also taxable. Here it does so based on the regulation on successions both at regional and national level. In the latter case, the tax rates are between just over 7% and 34%.

Are there any cases in which it is not mandatory to declare?

There are two cases in which it is not mandatory to declare cryptocurrencies before the AEAT. On one hand, when no movement is made with these digital currencies nor are they sold. And on the other hand, when cryptocurrencies are deposited abroad (for example, an exchange in another country) and do not exceed the amount of 50,000 euros -provided that they are not sold or obtained any profit from them.

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