With the rise of digital currencies and virtual assets, different countries may approach their taxation in different ways. After all, how do you tax something that essentially only exists online?
When it comes to cryptocurrency in Spain, the Spanish tax agency (Agencia Tributaria) considers cryptocurrencies to be capital assets that must be declared to the government, and capital gains from cryptocurrency transactions as income that should be subject to personal income tax.
So, if you’re wondering whether cryptocurrency is taxable in Spain, the answer is yes, in most cases. You may have to decare your crypto assets and savings to the Spanish tax authorities and report any crypto profits on your annual tax return so that you can pay any income tax that arises.
Tax liabilities and rates depend on the type of transaction, asset values, and individual circumstances – but here’s a summary of what you should know about paying tax on cryptocurrency in Spain.
How does Spain tax cryptocurrency?
Crypto investments in Spain may be liable for income tax, wealth tax, or inheritance tax, depending on the type of transaction and its value.
Profits from mining crypto rewards and trading cryptocurrency for another type of currency, whether crypto or EUR (or any other fiat currency), are gains that are likely eligible for income tax at a progressive rate between 19%–28%.
Additionally, if your crypto portfolio exceeds the wealth tax thresholds of €700,000 or €3 million, or pushes your total asset value over either of these limits, then your crypto assets could be taxed progressively between 0.2%–3.5%.
Similarly, inheriting cryptocurrencies is the same as being gifted assets, so inheritance tax could apply at progressive rates between 7.65%–34%.
If your cryptocurrencies are held in Spanish exchanges or foreign exchanges registered at the Bank of Spain, the tax rates applicable would depend on the region, as different autonomous communities set their own rates.
In some cases, as in Andalucia, taxes on wealth and inheritance may be reduced as low as 0%, effectively abolishing the tax – though assets and income must still be declared.
If you’re a Spanish tax resident, living in Spain for more than 183 days a year, you must declare all global assets and will be liable for them in Spain – but if you live in Spain for less than this, you’ll be a non-tax resident, and only liable for declaring and paying tax on Spanish assets.
How to report crypto assets in Spain
Crypto profits must be declared on the annual personal income tax return, la Declaración de la Renta, using the Modelo 100 form. This is typically due for the previous year by 30th June the following year.
Reporting all assets, not just cryptocurrency, that may be subject to wealth tax is done by submitting the Modelo 714 form by the same deadline.
Both forms require you to provide details of the ownership status and calculate the value of income and assets on the 31st December, the last day of that tax year.
However, when it comes to cryptocurrency specifically, aside from reporting profits and accumulated wealth to be taxed accordingly, there is another new form being introduced for 2024 (with the 2023 being the first eligible tax year to report).
This is the Modelo 721, which is an informative-only declaration of global crypto assets. If your crypto portfolio has a value of €50,000 or more as of 31st December, you must declare this using this form by 31st March.
Failing to report assets and income in time, and to pay any tax owed, by the deadlines mentioned can result in financial penalties for lateness and fines for failing to declare potentially taxable assets and income.
Get help with crypto tax rules in Spain
It’s important to maintain detailed records of your cryptocurrency transactions, including dates, values, and locations, so you can fill out the right forms with the correct information and avoid potential penalties from the Spanish authorities.
With Spain’s Ministry of Finance reportedly considering tax reforms that would grant them authority to seize cryptocurrencies and digital assets to pay outstanding tax bills, international crypto investors should make sure to comply with the rules in Spain.
Navigating the Spanish tax system can be very confusing for non-native speakers, especially if you’re unsure whether you’re a tax resident or not and what your tax obligations are based on the country you spend the most time in each year.
That’s why it can be extremely beneficial to consult English-speaking Spanish lawyers, who can explain your Spanish tax obligations based on your specific situation – including non-resident tax in Spain and the rules for global and Spanish assets.