Are you a tax resident in Spain who owns cryptocurrencies? Did you know you may have to declare the amount have you have to the tax authorities? Find out when you have to do this.
As cryptocurrency becomes more and more popular and widely available, governments have been cracking down on the taxation of digital assets, including in Spain.
If you are a tax resident in Spain, meaning you spend more than 183 days here or your financial interests are here, and you own cryptocurrency, then you need to be aware of the regulations surrounding how it should be declared.
In this article we’re specifically looking at when you simply need to declare that you hold crypto assets, not when you’re declaring the profit from selling these assets and how that’s taxed. That’s a separate topic, you can read about in our other articles.
READ ALSO – Modelo 721 explained: Spain’s new form for declaring crypto assets
Firstly, you only need to declare the crypto you hold abroad, not within Spain. There is some confusion about what this actually means, but typically experts consider it to mean any crypto held in foreign exchanges.
An exchange is the place where you buy and sell cryptocurrencies from, and you can also store crypto assets in these exchanges too.
Typically, though, most people store crypto in what is known as ‘cold wallets’ on their computers. If this is the case, then your crypto is considered to be located in Spain, not abroad.
If you do hold your crypto in a foreign exchange, however, you might not always need to declare it as there are certain exemptions, as well as thresholds.
According to the Spanish authorities, cryptocurrency exchanges that operate in Spain must register with the Bank of Spain. To do this, they must comply with a series of requirements, as well as have appropriate procedures in place for the prevention of money laundering.
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The list of exchanges currently registered with Bank of Spain includes Bit2Me (Bitcoinforme SL), Bitpanda, Binance, Revolut, Bitstamp, eToro, Coinbase and Trade Republic, among others. You can access and download the entire list here.
If you hold cryptocurrencies in any of these registered exchanges, then they may not be considered to be held abroad, according to Manzanares Law firm.
If they’re not on this list or your crypto is stored with a third party based abroad, then it’s likely that you will have to declare it.
READ ALSO: How is crypto taxed in Spain?
Crucially, the Tax Agency state that you only need to declare your crypto assets held abroad once they reach a certain financial threshold.
If the combined value of all virtual currencies held abroad as of December 31st does not exceed €50,000, there is no obligation to declare them, according to the Spanish Tax Agency.
If the value of all your crypto currencies does exceed more than €50,000 on this date, then you will need to declare it, provided it’s located abroad.
To do this you will need to complete Modelo 721, providing all the necessary information and file it between January 1st and March 31st.
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Remember, you won’t be expected to pay tax on assets held abroad, this is for information purposes only, but you can be fined if you don’t declare them.
If you’re unsure of whether your crypto is considered to be held abroad or you’re unsure if you need to declare it or whether your exchange is on the exemption list, you should contact a professional to learn more.
It’s important that you contact a crypto tax expert based in Spain as main regular gestores (accountants) are not up to date with crypto tax regulations or do not understand about how crypto works in general and therefore cannot advise you properly.
