Do I have to declare cryptocurrencies?

with the amazing increase in the value of some cryptocurrencies Like Bitcoin and Ethereum, cryptocurrency investors and enthusiasts may have many tax questions on their minds. With tax legislation stepping up enforcement efforts, even small investors need to make sure they don't break the law and know When do you have to declare cryptocurrencies?

Therefore, it is a very compelling reason for those who transact with cryptocurrencies that know the law and the taxes they may be incurring for their actions. The good news is that the cryptocurrency regulations are not yet 100% defined in terms of blockchain technology and there may be legal loopholes within the regulations. The bad news is that this gap can mean that many investors do not know what their obligations are under the law and if they really have to declare their earnings in cryptocurrencies.

If you want to avoid sanctions that can be imposed for not knowing if you really have to pay taxes. In this article we will explain if you are one of those people, how to declare cryptocurrencies and at what time

Income statement and cryptocurrencies: When do I have to declare them?

Seeing the rise and popularity of this new type of asset in recent years, the Spanish Tax Agency has started to regulate their participation and therefore, collection of cryptocurrencies, for which the declaration of cryptocurrency income must be made.

Según las consultas realizadas a la Agencia Tributaria, especialmente la V0999 / 2018, determinan claramente que hay que pagar impuestos cuando hay una transacción, es decir, un cambio de divisas. Esto ocurre a pesar de que no se haya pasado a Fiat. Si compraste un bitcoin por 15.000 euros y a las pocas semanas lo cambiaste por completo a ethereum, y en ese momento el bitcoin ya no vale 15.000 euros, sino 16.000 euros, entonces habrás ganado 1.000 euros y tendrás que declararlo. Esto se aplica no solo a Bitcoin, sino también a cualquier otra criptomoneda con la que operes.

That is why people are now required to report ownership of any cryptocurrency you own and any transactions you make to the Ministry of Finance. This is true for the currencies you have in Spain and in any other country in the world.

More specifically, you should only report the acquisitions, transmissions, exchanges, transfers, collections or payments of cryptocurrencies.

However, if you do not make any movement of your cryptocurrencies, you do not pay taxes, since there is no profit, even if the value of the cryptocurrency goes up or down. That is, if you save btc and at the end of the year its value rises by 1,000 euros, you will not have to declare any income gain. This is because you have not made any transactions.

How to declare cryptocurrencies

You must declare the cryptocurrencies when presenting the Income statement And these are the aspects that you should take into account:

The buy and sell cryptocurrency is exempt from VAT. For tax authorities, cryptocurrency is considered a normal currency; therefore, according to current legislation, your business is subject to value added tax, but exempt from paying it.

Those who engage in cryptocurrency trading through their own platform will be considered to carry out commercial activities, for which they are required to register with the Economic Activity Tax (IAE).

Since cryptocurrency is considered a means of payment, the tax agency understands that the virtual wallets are checking accounts. Therefore, if these virtual currencies are only deposited and you do not use them to trade, you do not have to do the cryptocurrency income statement.

When making cryptocurrency transactions, such as converting Bitcoin to Ether, investors they will have to pay taxes on the profits or losses generated. To understand the tax to be paid, the greater of the following concepts must be subtracted from the purchase value of the goods delivered: the market value of the goods delivered or the market value of the goods received.

Operations, whether with virtual currency or FIAT, must be declared in personal income tax, specifically in the capital gains and losses section of the savings tax base.

How much should you pay in taxes for cryptocurrencies?

You must pay tax on the profit generated (the difference between the sale price and the purchase price, YX). Applies to the following parts:

  1. From 0 to 6,000 euros, you must pay the 19%.

2. From 6,001 to 50,000 euros, the 21%.

3. From 50,001 euros, the 23%.

Types of cryptocurrencies

We show you a list with the types of cryptocurrencies so that you know them better and know when you have to declare cryptocurrencies:

  • Bitcoin

Bitcoin was the first cryptocurrency, created in 2009 by a person who has remained anonymous under the name Satoshi Nakamoto.

The primera criptomoneda descentralizada, utiliza tecnología blockchain para llevar a cabo pagos y transacciones digitales. Que sea descentralizada permite que las transferencias sean mucho más rápidas y menos costosas que las transferencias tradicionales.

  • ether

Ether, unlike Bitcoin, is a token, not a currency. It is used in transactions on the Ethereum network, a platform that uses blockchain technology, allowing the creation of smart contracts and other decentralized applications.

  • Binance Coin

La plataforma de intercambio de criptomonedas Binance tiene su propia moneda, Binance Coin. Puede ser utilizada como moneda y como token. Esto significa que se pueden usar para pagar tarifas en el intercambio de Binance y para impulsar el DEX (intercambio descentralizado) de Binance para crear aplicaciones.

  • Dogecoin

It started as a joke on cryptocurrencies, but in recent years it has increased in value, thanks in part to the support of Elon Musk. It was created to be used as a digital payment form like Bitcoin, but it's faster and easier to record payments. It has no limit on the number of coins that can be created over time, unlike Bitcoin.

  • Tether

Tether is a stable coin: a currency pegged to a fiat currency, in this case, the US dollar. Tether combines the advantages of a cryptocurrency, such as not needing financial intermediaries, with the stability of a government-issued currency.

En definitiva, ya seas pequeño o gran inversor de criptomonedas o incluso si te estás iniciando en este mundo, esperamos que este artículo te haya servido para aclarar tus dudas fiscales. En nuestro blog encontrarás cantidad de información relevante sobre finanzas, inversión, criptomonedas, ahorro e incluso lifestyle. We invite you to read this article about the prepaid cards without bank account to take another step in your financial life.

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