The Anti-Fraud Law has recently established that from 1 January 2023, taxpayers (both companies and individuals) who hold cryptocurrencies will have to declare to the Tax Agency both the amount and its monetary value at the end of the previous tax period. Although this is a very new issue, the Tax Agency has already established some criteria to follow.
Firstly, there are 3 main information forms by means of which cryptocurrency holders will have to inform the Tax Agency about the value of virtual currencies for the 2022 tax year.
- Form 721, which must be used to declare the wealth of coins whenever they exceed the amount of 50,000 euros. It must be filed before the end of the first quarter of 2023 (31 March 2023).
- Forms 172 and 173, by means of which the declarations of cryptocurrency service providers with tax residence in Spain will be made. Form 172 is intended for both individuals and companies to declare the balances of their cryptocurrencies (their own and those of their clients). Form 173, on the other hand, is reserved for companies with tax residence in Spain that participate in the cryptocurrency business regardless of where they provide their services and the location of the virtual currencies or their holders.
With regard to taxation, the new regulation considers that cryptocurrencies can be the cause of capital gains or losses, and however low these may be, the obligation to declare them arises. This obligation will only affect those who hold cryptocurrencies with a combined value of more than €50,000 at the end of the previous tax period. The new section 46 provided for this purpose will only have to be completed when there is a capital gain. There is no obligation to declare losses, but it is recommended that they be included because they can be offset in the future against other gains (if they occur). The sale, exchange of cryptocurrencies and capital gains are taxed in the special part (savings base) of personal income tax. Mining operations, by contrast, are taxed on the general tax base.
Cryptocurrencies are treated in the same way for Wealth Tax purposes as foreign currency capital, so they must be declared at their market value on the date of accrual (31 December). If the individual does not exceed the minimum exemption from this tax, they do not have to declare them.
We recommend to analyse the new obligations in detail, because failure to comply it will result substantial penalties.