On 31 January, the resolution of the Tax Agency approving the Annual Tax and Customs Control Plan for 2022 was published in the Official State Gazette.

Among the economic activities on which the Tax Agency will focus and exercise special control will be the digital economy and, specifically, operations related to cryptocurrencies.

A cryptocurrency is a virtual currency that can be exchanged for other traditional currencies and used as a means of payment or investment. In Spain, the CNMV (NSMC) has warned on several occasions of the risk of these currencies, as they are not supported by any central bank.

From the point of view of reporting obligations, the Tax Control Plan includes as an objective the preparation of declaration models in which the holding of virtual currencies located abroad will have to be reported, all in line with the new reporting obligation incorporated into the tax system by the Law on Measures to Prevent and Combat Tax Fraud.

When we talk about cryptocurrencies, we are not only referring to Bitcoin, which is the most popular, but also to all those virtual currencies or cryptoassets whose main feature is the support of Blockchain technology, such as Ethereum or Litecoin, among others.

Tax obligations

The supply of cryptocurrencies is exempt from VAT for both buyer and seller. VAT is not imposed on the transfer of virtual currencies, but only on the purchase of goods and services.

Transactions involving the purchase and sale of cryptocurrencies may give rise to a capital gain or loss, insofar as such transactions result in a change in the composition of the taxpayer’s assets.

Capital gains are calculated as the difference between the transfer value and the acquisition value, excluding expenses such as commissions.

If you have carried out more than one transaction with cryptocurrencies, you must apply the FIFO (first in, first out) criterion. In other words, the first sales of cryptocurrencies correspond to the acquisition value of the first transaction carried out.

If you are an individual and you invest in cryptocurrencies, you will have to declare the incomes in your tax return, incorporating them into the capital gains of the savings tax base.

If the transaction is carried out by a legal entity, the gains obtained with cryptocurrencies are declared in the corporate income tax.

In addition, there are other times when taxpayers are obliged to declare the holding of these assets, such as when they are liable for Wealth Tax, for those assets exceeding two million euros, as well as the receipt of cryptocurrencies in inheritance or donation in accordance with state and regional inheritance and donation legislation.

Roberto Cerrato

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