Taxation of Bitcoins in Spain: How do they pay taxes?

in Tax

Cryptocurrencies, such as the known Bitcoins are the order of the day and each year that passes gain more followers. Although it seems that they are surrounded by an alleged anonymity, they are not exempt from fulfilling the fiscal obligations that are supposed to them and the tax office has long warned that there will be seriousness about the issue.

If you use Bitcoins as a payment currency or as an investment, this article will serve as a reference on how to pay taxes. You will save yourself more than one dislike.

How the Bitcoin investments are taxed in the income statement

If you buy and sell Bitcoins and you get a profit from it, it will be considered a capital gain in the rent. In this way, you will have to add it to the rest of the capital gains and losses as a result of trading on the stock market or buying an investment fund. The percentage of this taxation is:

  • 19% if the profits are less than € 6,000
  • 21% if the profits go from € 6,000 to € 50,000
  • 23% if the profits are greater than € 50,000

In order to calculate this capital gain, the difference between the purchase price and the sale price must be taken into account, without taking into account the expenses. For example, if you buy Bitcoins for a value of € 5,000 and sell them for € 7,000, you must add € 2,000 to the rest of the capital gains.

It should be noted that if you change Bitcoins for other virtual currencies, it will be considered a sale, and you will have to pay for the benefit obtained even if you do not take the money from the virtual wallet and pass it to Euros.

What happen if you have losses with the sale of Bitcoins?

If you have losses with the purchase of Bitcoins you can compensate them with the rest of the capital gains, exactly as with the shares. If in the declaration of that same year there were no profits with which to compensate, it can be done in the following 4 years.

VAT in Bitcoin as payment currency

Since 2015, the European Union considers Bitcoins as another payment method and in Spain it is legal to use it since that same year. Therefore, VAT is applied to any purchase of goods and services, but not in the transmission of currency.

Therefore, as there is no VAT, there is also no obligation to pay the Bitcoins for the Transfer Tax.

Should we present the 720 model for investing in Bitcoins?

If you invest in Bitcoins or other cryptocurrencies you may wonder if you should file the declaration of assets hold abroad (720 Form). Technically they are not located in any specific geographic point, so, although the tax agency has not manifested itself in this regard, it should not be necessary to submit it.

To prepare the Personal Income Tax (IRPF) statement (including the taxation of your Bitcoins) without losing time and correctly, we recommend that you go to a tax consultant like GM Tax. We will treat your case in a professional and personalized way.