How to File Crypto Taxes in Spain

Cryptocurrencies have become increasingly popular in Spain in recent years, and as such, the Spanish government has implemented laws and regulations regarding the taxation of bitcoin and cryptocurrency transactions. Investors need to understand how to properly file their crypto taxes in Spain, as failure to do so can result in hefty fines and penalties.

Taxes on Crypto in Spain

Cryptocurrency is treated differently from other forms of investment in Spain. Generally, crypto activities, such as trading, mining, and exchanging crypto assets, are subject to taxation. However, there are some exceptions, such as when crypto assets are held for long-term investments, or when they are used as a form of payment. 

When trading cryptocurrencies, two types of taxes may be applicable. The first is capital gains tax, which is charged on profits made from the sale of crypto assets. The amount of tax due will depend on the type of asset, the amount of time it has been held, and the amount of profit made.

The second type of tax is Value Added Tax (VAT). This is a form of consumption tax that is charged on the purchase of goods and services. In the case of crypto assets, this would include any fees paid for trading, mining, or exchanging crypto assets.

It is important to note that not all crypto activities are taxable in Spain. For example, when crypto assets are held for long-term investments, they are not subject to taxation. Similarly, if crypto assets are used as a form of payment, they are also not subject to taxation.

Crypto activities such as mining and exchanging crypto assets, however, are subject to taxation. Mining is the process of verifying and adding transactions to the blockchain, and is subject to VAT. Exchanging crypto assets is also subject to taxation, as it is viewed as a form of trading.

In addition to taxes on crypto activities, some taxes may apply to the income generated from investing in crypto assets. These include income tax, which is levied on profits from trading and investing in crypto assets, as well as inheritance tax, which is charged on any profits that are passed on to heirs.

Income Tax and Income Savings Tax

Income tax in Spain is difficult for most investors to understand, and a crypto tax calculator can be greatly beneficial.

The first thing to keep in mind is that any profits made from trading or investing in cryptocurrency are considered to be taxable income. This includes any profits made from buying and selling cryptocurrencies, as well as any income generated from mining activities. Additionally, any profits made from lending, staking, or other activities related to cryptocurrencies are also considered to be taxable income.

In Spain, individual residents pay the Personal Income Tax (PIT). The PIT is grouped into two classes – general taxable income and savings taxable income. Savings taxable income rate is used in taxing your capital gains and interest, whereas the general taxable income rate applies to other income (payments, wages).

In terms of tax rates, the Spanish government has put in place a progressive tax structure for cryptocurrency trading and investing. Here’s how taxes are classified in Spain:

For the first €6,000, the applicable tax rate is 19%.

For profits between €6,001 and €50,000, the applicable tax rate is 21%.

For profits between €50,000 and €200,000, the tax rate that applies is 23%.

Those who fall into the category of €200,000 to €300,000 pay 27% tax

Finally, those with income above €300,000 pay 28%.

Generally speaking, income tax is assessed on profits made from cryptocurrency trading and income savings tax (capital gains tax) is applied on profits from the sale of cryptocurrencies. The income tax rate in Spain is progressive, with a marginal rate ranging from 19% to 45%, depending on your income level. The income savings tax rate is 19%.

Income tax applies to profits made from trading cryptocurrencies, such as Bitcoin, Ethereum, or any other cryptocurrency. When calculating income tax, Spanish taxpayers must also take into account the purchase price of the cryptocurrency, the selling price of the cryptocurrency, and any other costs associated with the transaction, such as commission fees.

Income savings tax (capital gains tax) applies to profits made from the sale of cryptocurrencies. This includes both short-term and long-term gains. Short-term gains are profits made from the sale of cryptocurrencies within a year of purchase, while long-term gains are profits made from the sale of cryptocurrencies that have been held for more than a year. The rate of income savings tax is 19%.

To illustrate this, let’s consider two examples.

First, let’s say you purchased 1 Bitcoin for €10,000. You then sell it six months later for €15,000. In this case, you would be liable for income tax on the €5,000 in profits. The rate of income tax would be determined by your income level.

Second, let’s say you purchased 1 Bitcoin for €10,000 and held it for more than a year before selling it for €15,000. In this case, you would be liable for income savings tax (capital gains tax) on the €5,000 in profits. The rate of income savings tax is 19%.

Wealth Tax and M720 Declaration

Spanish residents are expected to pay a Wealth Tax on the net assets they own worldwide. Besides, Spanish non-residents also pay wealth tax on goods and rights that are located, may be exercised, or should be complied with in Spain.

In addition, Spanish citizens are required to fill out the Spanish tax form 720, which is a declaration of all assets they hold overseas, not located in Spain. They are expected to give the necessary information regarding offshore investments, accounts and real estates they own abroad. This form assists the government in fighting against evasion of tax.

VAT

While some countries have clear guidelines on how VAT should be paid on cryptocurrencies or crypto related assets, Spain does not yet have clearcut guidelines or rules on how this should be handled.

Tax-Free Crypto Events

Transferring crypto between wallets is also tax-free in Spain. This means that if you transfer your crypto from one wallet to another, you will not be taxed on the transaction. This is an attractive option for those who want to move their crypto from one wallet to another without having to worry about taxes.

Finally, holding crypto is also tax-free in Spain. This means that if you purchase crypto and then hold onto it for a long time, you will not be taxed on the gains that you make from the appreciation of the crypto. This is a great option for those who want to invest in crypto and not have to worry about a large tax burden.

When it comes to crypto activities that are tax-free in Spain, it is important to remember that these activities are only tax-free if they are done within the country. If you purchase crypto from another country or transfer crypto to another country, you may be subject to taxes in that country. It is important to research any country’s tax laws before engaging in any crypto activities.

Filing your crypto taxes

Cryptocurrency tax calculators are designed to make filing your crypto taxes as simple as possible. They are typically user-friendly and easy to navigate, so you can quickly and accurately calculate your taxes without any confusion. The calculator will typically prompt you to enter information about your trades, including the amount of your investment, the exchange, wallet, or blockchain you used, the type of cryptocurrency traded, and the date of the trade. Once you have entered all of the necessary information, the calculator will automatically calculate your crypto taxes in Spain.

One of the great features of a cryptocurrency tax calculator is that it can easily import your trades from the exchanges, wallets, and blockchains you use. This eliminates the need to manually enter your trades into the calculator, saving you time and effort. You can simply upload your trades from your exchanges, wallets, or blockchains, and the calculator will automatically fill in all of the necessary information. This makes it easy to ensure accuracy while filing your crypto taxes in Spain.

Another great feature of a cryptocurrency tax calculator is that it can help you quickly and easily prefill the necessary forms. The calculator will typically generate several different forms, depending on the type of trade you have conducted. This includes a capital gains tax form, a cryptocurrency trading tax form, and a capital gains exemption form. The prefilled forms can then be easily filed with the Spanish tax authorities, saving you time and effort while filing your crypto taxes in Spain.

Finally, a cryptocurrency tax calculator can help you quickly and accurately calculate your crypto taxes in Spain. The calculator will typically provide you with an easy-to-read summary of all of your trades and the taxes due on them. This makes it easy to determine exactly how much you owe in taxes and to ensure accuracy while filing your crypto taxes in Spain.

Summary

Overall, a cryptocurrency tax calculator can be an invaluable tool for filing your crypto taxes in Spain. It makes the process simpler and more efficient by allowing you to quickly and easily import your trades from the exchanges, wallets, and blockchains you use, prefill the necessary forms, and accurately calculate your crypto taxes. With a cryptocurrency tax calculator, you can easily ensure accuracy while filing your crypto taxes in Spain and can save yourself time and effort in the process.