As expected, the Treasury began to put the magnifying glass on virtual currencies with the aim of taxing them and creating new taxes with which to obtain profits that currently escape fiscal control. This has caused the ordinary citizen to still have doubts about the management of crypto assets in relation to the Treasury, since they continue to have no specific regulation. The phenomenon of cryptocurrencies and their impact on the financial industry has caused Europe to take the initiative with the MiCA proposal (Market in Crypto Assets). Despite this, this regulation is still in the process of being drafted and implementation is not expected to start before 2024.
The main questions that most torment investors range from when cryptocurrencies must be declared to what taxes must be paid, and if not, what kind of sanctions would someone who does not comply with the requirements set by the Treasury have to face.
But then, What taxes will I have to pay if I have cryptocurrencies and I am a tax resident in Spain?. From now on, these digital assets will be considered part of the holder’s assets. This means that citizens have to declare their possession in the Wealth Tax (IP) as long as a certain threshold is exceeded. According to the regulations governing this tax, this would be when the value of their assets (or rights) exceeds 2,000,000 eurosalways as a general rule. The cryptocurrencies would be considered as part of the taxpayer’s wealth in the IP and as a profit obtained thanks to their transmission or income tax returns.
Do not forget that we will also have to declare its transmissioneither through personal income tax (IRPF) or inheritance and gift taxes, respectively.
Which brings us to the next question, When do you start declaring? On the website of the Tax Agency we can consult the taxpayer’s calendar for the year 2022. The new IRPF and IP campaign begins on April 6. They will be able to present their declarations from that date and until June 30, the taxpayers who must enter their tax quota. In case of having to enter with direct debits, the deadline will be June 27.
The receipt of cryptocurrencies as inheritance or gift will also be subject to tax. Consequently, according to the regulatory framework of the state, they will be taxed with rates ranging from 7.65% to 34%. The amount that the heirs or donees will have to pay will depend on the autonomous community where they reside and the degree of kinship.
What happens if I buy cryptocurrencies but decide not to sell them? Are they declared too? In this case it depends on the type of tax. Only the profits reported for obtaining, transmitting or selling cryptocurrencies are declared in the IRPF.
This includes the remaining interest on deposits and bank accounts, as well as the positive balances derived from capital gains and losses from disposals of assets and equity elements, such as shares, real estate or investment funds.
We will also have to declare their possession if we have acquired cryptocurrencies that are abroad for a value greater than 50,000 euros.. Once we have declared this, if in successive years the variation in its value exceeds 20,000 euros, it must also be declared. Likewise, in accordance with article 24 of Law 19/1991, if you have assets above 2,000,000 euros the taxpayer must state the price of the cryptocurrencies he owns.
Will we have to pay VAT every time we buy cryptocurrencies? Since it is not about goods or services, cryptocurrencies will be exempt from VAT. The law that regulates VAT in Spain exempts financial operations related to foreign currency from having to make this payment.
It must be emphasized that there will be no difference in the taxation of the sale of crypto assets and shares.
What percentage of the profits obtained should we pay? It will fluctuate between 19% and 26%, depending on the profit that has been obtained. This is due to the fact that income tax in Spain is progressive, so when an increase in wealth is taxed, it is paid based on the profit obtained. As the capital gain increases, the tax rate will also increase. The taxation will be made based on the sections. In the first tranche, 19% will be applied, reaching up to 6,000 euros; in the second section the percentage reaches 21%, standing between 6,000 and 50,000 euros; between 50,000 and 200,000 it will rise to 23%; and, finally, if the earnings exceed 200,000 euros, the figure will skyrocket to 26%.
Despite this general rule, it must be considered that the final installment to be paid will be influenced by other variables. Variables such as real estate operations, other types of income and the particular situation of each taxpayer’s assets will be taken into account.
If I have income thanks to cryptocurrencies in the first quarter of 2022 but I move to another country during the rest of the year, can the Treasury penalize me?
Only if the tax obligations with Spain are not met. The The Spanish treasury cannot sanction anyone for the mere fact of moving to another country. However, it is possible if a person changes their address and fails to comply with the legal requirements to declare income or if it is done for joint tax evasion, that is, in the case of a change of residence with the sole purpose of evading taxes.
In this way, The income obtained in Spain must be declared through Form 100 of IRPF if you are still a tax resident in the country. Anyone who has resided in Spain for more than 183 days, that is, more than six months, is considered a tax resident. Non-residents would have to declare through another model, the 210.
So, The Treasury will be able to sanction the taxpayer if it is shown that he has not declared certain returns due to malicious action or negligence, or when the change of residence is proven for reasons of tax evasion, that is, to reduce or eliminate taxes that the taxpayer would have had to pay if he had declared the income as a resident in Spain.
What happens if you move to another country for more than 6 months but you have a home or a company in Spain? Will you have problems with the Treasury if you withdraw from the Spanish treasury?
Generally not. The fact of owning a home or a company does not in itself make you a tax resident in Spain. To unsubscribe, you must reside for a period greater than 6 months in a foreign country., request a tax residence certificate and subsequently notify this change to the Treasury. What happens is that, after unsubscribing, if you continue to have a home or company in Spain, this could be an indication that the person still has personal or professional interests in the country.
To understand this, it is necessary to clarify that the condition of residing in the foreign country for at least 183 days a year it is something that is required, but that by itself is not enough to prove that you are indeed residing in a country other than Spain.
The notification of cancellation must be made through Form 030. The term established for this is one month from the date the taxpayer changes address.
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