How many taxes do you pay for investing in cryptocurrencies? Personal income tax, Companies …

Cryptocurrencies were one of the sensations of the markets last year. That furor raised a good part of the main cryptocurrencies to their historical maximum in 2021. This is the case of bitcoin, which between October and November touched 70,000 dollars (about 60,000 euros). The annual rise of the most popular of the digital currencies was 65%.

More and more investors dare to take the step and bet on cryptocurrencies. Around 14% of Spanish investors have money in cryptocurrencies such as bitcoin or ethereum, a percentage that has exploded in the last year, according to the third edition of the Savings and Investment Observatory of Bestinver and IESE. Specifically, there are more people who have bought cryptos in Spain than those that have corporate bonds or public debt to their credit.

Now, it is convenient to know how this new reality is taxed before the Treasury. Finect has a bitcoin and cryptocurrency showcase where information about these digital currencies can be consulted.

The National Securities and Markets Commission (CNMV) recalls that crypto assets can be elements that revitalize and modernize the financial system in the coming years. At the same time, the supervisor nuances the statement: so far, they are a complex and risky investment, as well as little regulated.

Cryptocurrencies and their taxation is being one of the focuses of the Tax Agency. The Treasury has redoubled efforts to collect and control all operations with crypto assets.

Bitcoin in the income statement

People who at some point in the past year buy Bitcoin or another digital currency, should reflect it in the Income 2021 campaign. For practical purposes, investing in cryptocurrencies hardly varies in the way of buying or selling currencies, especially through a broker. Cryptocurrencies are declared in box 389, destined to “other capital gains to be entered into the taxable base of savings.”

For the Treasury, the money obtained -or lost- with cryptocurrencies is considered a capital gain or loss. That is, a Bitcoin owner will pay between 19% and 26% in personal income tax in the next statement. Until this past year the cap was set at 23%. Since 2022 the Government includes a fourth section that will already be seen in Income 2021.

The Tax Agency establishes that 19% is applied to the first 6,000 euros of capital gain, which rises to 21% for the next 44,000 euros (section 6,000 to 50,000 euros). When the declarant claims to have earned with investments in cryptocurrencies more than 50,000 euros but less than 200,000 during a year, the rate rises to 23%. The last tranche that is now being released, taxes 26% of earnings over 200,000 euros.

What happens in the opposite scenario, when there are losses? The declarant can compensate them with gains in concept of transmission of other patrimonial elements. You will have the following four years of Income to carry out this compensation.

But how is the net worth of a cryptocurrency calculated? Suppose that a person has bought bitcoins throughout the year and has taken a cut from them: that subject bought bitcoin at 6,000 euros and sold it at 30,000 euros months later. During the income statement, it must reflect that you had a profit of 24,000 euros, to which a tax rate of 21% will be applied (except for the first 6,000 euros, which are taxed at 19%).

Other taxes on cryptocurrencies

The Treasury has been warning since 2017 that cryptocurrencies are subject to wealth tax. In other words, the value of the cripto it is added to the calculation of the declarant’s equity, as is the case with stocks or investment funds.

In addition, digital currencies pay 25% in Corporation Tax, depending on the difference in how much the cryptocurrency cost to buy and the profit from the sale. Likewise, a 10% depreciation for impairment may be added.

Tax to change cryptos

A very common mistake is to think that it is not necessary to pay taxes on the money earned by exchanging some cryptocurrencies for others. Nothing is further from reality. In these cases, the Treasury understands that there is an alteration in the composition of the patrimony for which it is taxed, since there is a change in its value.

The logic of the Treasury is as follows: a person who invests 1,000 euros in bitcoin and after a month decides to invest that money in ethereum (now with a value of 2,000 euros, for example), is making money (a capital gain). In addition, in theory, that investor must pay individual taxes for each and every one of the changes in Income.

Beware of fines

The Government approved the new tax fraud law in 2021. This makes room for fines for not declaring cryptocurrencies in a timely manner. The text includes the obligation to inform the holders of cryptocurrencies stored abroad. And it extends the obligation to its beneficiaries, authorized persons and anyone who may dispose of them. “The virtual currencies located abroad of which one is the owner, or with respect to which the status of beneficiary or authorized or in any other way has power of disposal. Custodial by people or service entities to safeguard passwords private cryptographic companies of third parties. To maintain, store and transfer virtual currencies “.

The new legislation warns: “Failure to file on time and submit information returns incompletely, inaccurately or with false information constitute tax offenses.” The penalties can be high, specifically “5,000 euros for each piece of information or data set referring to each virtual currency individually considered according to its class, which should have been included in the statement, or had been provided in an incomplete, inaccurate or false way, with a minimum of 10,000 euros “.

It is mandatory to inform in form 720 of declarations of assets and rights abroad about the possession of cryptocurrencies abroad. The translation is that a user must include their crypto assets in this model.

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