Cryptocurrencies have burst into the financial world with force, and that is why the Tax Agency is once again focusing on them, which is why it plans to send almost a million notices to remind taxpayers of the need to declare bitcoin, ethereum or other digital assets. One of the main problems, however, lies in the fact that the majority does not know how to do it, as indicated by a recent survey carried out among users of the Binance and TaxDown platforms.
Although more than half opt to resort to agencies and professionals in such a cumbersome process, it is still advisable to know how these assets are taxed to avoid problems with the treasury. Especially if one takes into account that one of the novelties of the 2023-2034 income campaign is that the Treasury has introduced detailed information on the holdings and movements of cryptocurrencies abroad in taxpayers’ tax data, coinciding with the growing importance and regulation of this type of currencies.
Added to this is the new obligation to report, through form 721, the possession of virtual currencies held abroad as of December 31 of last year for a value greater than 50,000 euros. The period to register the form opened on January 1 and ended on March 31.
How cryptocurrencies are included in the return will depend on how they were acquired and used. For example, if you bought virtual currencies and did not sell them in 2023, “you do not have to include them” in your income, they explain from TaxDown. Another quite common assumption is to exchange one cryptocurrency for another or do it for euros or dollars. In this case, in the eyes of the Treasury, “a capital gain or loss” has occurred that must be declared. The same occurs when this type of asset has been used to make payments for goods and services. In addition, there are other cases that require accounting with the Tax Agency.
Marta Rayaces, head of traditional investments and crypto assets at TaxDown, details that when a virtual currency is sold or exchanged for another “it is taxed on the savings tax base”, so a tax rate ranging from 19 to 28 is applied. %. The same occurs with the remuneration obtained through investment in cryptocurrencies, which consists of having them immobilized for a time, either because we lend them (lending), contribute them to contribute to the operation of the network (staking) or because we provide liquidity. to a protocol or a pool (yield farming).
Another common assumption is that the taxpayer exchanges his cryptocurrencies for a consumer good, such as a car. In this case, he should pay tax on the capital increase that he has obtained since he purchased the cryptoassets until the date of transfer, even though it has never been reconverted into fiat money. Of course, to determine the amount to be paid to the Treasury, the value in euros of the cryptocurrency at all times will be taken into account and the gain will be reflected in the tax base of the savings.
However, the profits obtained from investing in cryptocurrencies are not always reflected in the savings tax base. If the taxpayer has received AIdrops – a term that refers to the free distribution of tokens to cryptocurrency owners in exchange for meeting certain requirements -, in this case the Treasury will interpret it as a gift and it will be included in the general tax base of the declaration, with which you will be taxed at a higher rate, “from 19 to almost 50%, depending on where you reside,” adds Rayaces.
Finally, remember that taxpayers who have had returns in 2023 from mining cryptocurrencies using their own means of production and human resources in order to create this type of assets “will have to register as self-employed.” “However, if they have staked by providing their tokens to participate in the validation of the network’s transactions and their blocks, in exchange for which they have received remuneration, it will not be considered a professional activity, although the profit must be included in the tax base of savings.
In any case, the Tax Agency remains vigilant regarding virtual currencies even though they are deposited on exchange platforms abroad, so failing to provide this information may end in a sanction.