Crypto tax declaration in Spain: What you need to know as of 2024
Who is required to declare cryptocurrencies in Spain?
From 1 January 2024, those tax resident in Spain who own and operate virtual currencies will be required to report their transactions to the Treasury. This guide details who is subject to this obligation and what procedures they should follow when making their declarations.
Obligation to Declare Cryptocurrencies in 2024
Individuals and entities resident in Spain, as well as permanent establishments in Spanish territory of foreign entities, are obliged to declare cryptocurrencies. This includes those who provide exchange services between virtual and fiat currencies, intermediate in such transactions or manage private cryptographic keys.
The declaration should cover transactions involving the acquisition, transmission, exchange and transfer of virtual currencies, as well as receipts and payments made with cryptocurrencies. The balance information should include details such as the type of virtual currency, the number of units as at 31 December and their valuation in euro.
The first cryptocurrency declarations must be submitted from 1 January 2024, covering transactions carried out from 25 April 2023.
Declaration of Transactions in Virtual Currencies
They will be obliged to file an annual information return on transactions involving the acquisition, transmission, exchange and transfer of virtual currencies:
– Individuals and entities resident in Spain.
– Permanent establishments in Spanish territory of foreign entities that provide exchange services between virtual currencies.
The information required includes details such as full name, address, VAT number, type of virtual currency and date of transaction. The type of virtual currency units involved and their value in euros must also be specified.
Exceptions to the Transaction Reporting
Persons or entities whose activity is limited to the provision of advice on virtual currencies or the mere handling of orders for payment and collection in fiat currencies are not required to report transactions in virtual currencies. Nor are entities providing exchange services between virtual currencies and fiat currencies.
Obligation to Declare Virtual Currencies Abroad
Individuals and legal entities resident in Spain, as well as permanent establishments in Spanish territory of persons, must file an annual information return on all virtual currencies located abroad. This includes those who have been holders, authorised or beneficiaries of such virtual currencies, or have had powers of disposal over them.
The information required for the foreign declaration covers information such as full name, VAT number, address, tax identification of the country of tax residence, website address and balances expressed in virtual currency units and their value in euro.
Subsequent returns are only required if the combined balance has increased by more than €20,000 since the last return was filed.
Forms for Declaring Cryptocurrencies and Virtual Currencies in Spain
The following forms shall be used to declare cryptocurrencies and virtual currencies:
– Form 172: balance of virtual currencies.
– Form 173: transactions carried out.
– Form 721: cryptocurrencies located abroad.
Form 172 is filed in the event of obtaining a profit of more than 1,000 euros as a balance of virtual currencies. Form 173 compiles details on the person or entity that carried out the transactions, the type of currency used and the amount involved.
In addition, a section has been added to the tax return specifically dedicated to the declaration of cryptocurrencies. This section will require details on transactions carried out, value of acquisitions and corresponding dates, facilitating the calculation of losses or gains in the draft income tax return.
Obligation to File Form 721
From 2024, the balance of virtual currencies located abroad will be required to be reported on Form 721. This form will include personal data, taxpayer identification number, key holding entity, identification and balances of each cryptocurrency, along with its value in euros.
It will not be necessary to report cryptocurrencies abroad if the total balance does not exceed 50,000 euros in euro value as at 31 December.
Fines for Failure to Declare Cryptocurrencies
Fines for each undeclared cryptocurrency amount to around €5,000, rising to a minimum of €10,000 if incomplete, false or inaccurate information is provided. The omission of income obtained with cryptocurrencies in the Renta can result in a fine of 26% of the amount not paid.
