Obligation to declare crypto-currencies
If you have money invested in virtual currency, this is of your interest.
The Spanish tax agency has published the information forms that will be compulsory for people with tax residence in Spain from 2023 to report on transactions carried out with cryptocurrencies.
See what these new forms are and how they affect you.
Form 172 and 173
“Exchange platforms”. If you have bitcoins, Ethereum, ripple, nxt … and make purchases, sales and/or exchanges of these virtual currencies, you should be aware that the so-called “exchange platforms” – the entities through which these types of transactions are carried out – will be obliged to report them.
Specifically:
– This obligation is going to fall on entities resident or with a permanent establishment in Spain that allows transactions with cryptocurrencies to be carried out or provide virtual currency (or similar) maintenance and storage services.
– They will have to provide this information for the first time during January 2023 and the financial year 2022.
This affects you because the tax agency will have information on what you have invested in cryptocurrencies or do any transactions with cryptocurrencies.
172 Form
These platforms must file form 172 (Information return on balances in virtual currencies), in which they must inform the Tax Authorities, among others, of the following data:
– The identification of the persons or entities that have been holders authorised, or beneficiaries of virtual currencies at some point during the year.
– Data on the number of virtual currencies at 31 December, as well as their market value and public keys.
Please note! This information will make it possible to verify that these assets are subsequently declared for Wealth Tax purposes.
173 Form
On the other hand, these exchange platforms must also file form 173 (Information return on transactions with virtual currencies), declaring the transactions of acquisition, transmission, exchange and transfer of virtual currencies carried out during the year, as well as the collections and payments made in these currencies.
This declaration must also include the commissions and associated expenses received by the platform.
With this information, the Tax Authorities will be able to verify that these transactions have been correctly declared for Personal Income Tax and Corporate Income Tax purposes.
721 Form
Cryptocurrencies abroad. Given that the Inland Revenue can only oblige exchange platforms located in Spain to declare them, if you have cryptocurrencies in entities located abroad, it is you who will be obliged to report them.
To do so, during the first quarter of each year you will have to file the new form 721 (Informative declaration of virtual currencies located abroad). Thus, for the first time, in the first quarter of 2023 you will have to report on the year 2022.
Similar to Form 720. This new declaration is very similar in content to Form 720, which is already used to declare other assets located abroad:
– Only taxpayers who on 31 December of the previous year have been holders, authorised or beneficiaries of cryptocurrencies abroad for a combined balance of more than €50,000 will file form 721.
– Those legal entities or entrepreneurs who have registered these virtual currencies in their accounts, individually and correctly identified, will not be obliged to file a tax return.
– The filing of form 721 in subsequent years will only be required when the balance of virtual currencies has increased by more than 20,000 euros.
In summary:
From 2023
Platforms established in Spain that allow transactions with cryptocurrencies must inform the Treasury with forms 172 and 173.
Holders, with tax residence in Spain, of crypto-currencies abroad, must declare those held abroad with form 721.
