Spain’s Taxation on Crypto Currency

Raymundo Larraín Nesbitt, November, 21. 2022

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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:

  • From €0 to €6,000 – 19%.
  • From €6,001 to €50.000 – 21%.
  • From €50.001 to €200,000 – 23%
  • Over €200,001 – 26%

 

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.

At Larrain Nesbitt Abogados we have over 19 years’ experience buying, selling, and renting properties. We are also specialized in taxation, immigration & residency visas. You can contact us by e-mail at info@larrainnesbitt.com, by telephone on (+34) 952 19 22 88, or by completing our contact form to book an appointment.

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