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By Raymundo Larraín Nesbitt
Director of Larraín Nesbitt Abogados
21st of November 2022
Unbeknownst to most people, Spain has passed legislation on the matter of taxation on Crypto Currency. Spanish resident taxpayers have a legal obligation to declare their purchase and sell
As any economist worth his salt will tell you, the success behind any profitable portfolio is a healthy diversification: real estate, bonds, commodities, shares, and cryptos. Cryptos have become very popular over the last decade, not only as a means of payment, but also as a store of value as they are widely regarded as the future of trading. This success has prompted the appearance of hundreds of digital currencies, with even central banks taking a jab at it with an aim to control the market’s ebb and flow. Despite their resounding success, they have taken a beating lately, even denting the main front runners. The strongest will no doubt rebound in a new expansion phase.
Spanish tax residents are under a legal obligation to declare them. You should declare the purchase & sale in your IRPF tax return (personal income tax return).
If you hold over €50,000 abroad, you must include it in your annual 720 tax return. Annual variations in value in excess of €20,000 need to be reported.
As a general rule, if you hold over 2mn euros in cryptos (and/or other assets), you also need to include them in your Wealth Tax return.
Inheriting cryptos is also taxable. Because of devolved competencies on inheritance matters, this will change from one region to the next.
Capital gains (on selling) is taxed following a progressive sliding scale:
Although cryptos have suffered greatly as of late, we view this as a healthy market correction that will purge all the exuberant excess, weeding out thousands of cryptos from the market on its wake, leaving only the survival of the fittest.
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