At the beginning of April 2024, the campaña of the Income Tax Return 2023 which, among other new features for taxpayers, involved the notice about ‘'CR2 Informed Virtual Currencies'’. Therefore, the minimum profit amount disappears for declare cryptocurrencies in your income tax return.
From 2024, the minimum threshold of €1,000 will be eliminated. Therefore, taxpayers will be required to declare any cryptocurrency transaction, regardless of whether it generated income or losses, as well as the amount.
This applies to both cryptocurrency mining and trading. The tax authorities will now have direct access to all transactions. This is because, from now on, cryptocurrencies are considered part of one's assets and income. Consequently, they are considered equivalent to money earned from selling stocks or performing work.
All cryptocurrency transactions must be declared.. Therefore, it includes everything from selling for money to exchanging for other digital currencies or using them to buy certain goods or services.
The exact statement from the Treasury reads as follows: “We remind you that capital gains and/or losses must be declared in the section 'Capital gains and losses derived from the transfer or exchange of virtual currencies by individuals' (box 1800 and following) of the tax return''.
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How to declare cryptocurrencies on your tax return?
His declaration of cryptocurrencies in the Income Tax It will be carried out in the section 'Capital gains and losses derived from transfers of other assets'’. Thus, in box 1626 you will see the key 0, with the campo of 'Virtual Currencies'.
The taxpayer must write the name of the cryptocurrency, the key, or what has been done with the asset, in addition to the acquisition and transaction values. Similarly, for profits exceeding €50,000, it will be mandatory to complete form 721.
How are cryptocurrency earnings taxed?
It will depend on the amount involved in the transactions. cryptocurrencies to be declared. This will generally be included in the savings tax base. Therefore, income tax form 19% is applicable to profits of less than €6,000, and form 21% is applicable to profits between €6,000 and €50,000.
Similarly, personal income tax (IRPF) 23% is established for profits between €50,000 and €200,000, and personal income tax (IRPF) 26% for profits exceeding €200,000.
Both direct and indirect staking are subject to VAT, Unlike mining, indirect staking is exempt from this tax. Delegated staking is done through a platform. However, when a person deposits their coins in a wallet and receives a portion of the rewards, it will be subject to this tax. a return on movable capital. This would be taxed at the rate of 19-21-23-26% in 2022 (19-21-23-27-28% from 2023 onwards). This opinion is shared by several experts in the field.
Penalties for not declaring cryptocurrencies in the rent
Those taxpayers who did not inform the Treasury Those who engage in such activities could face fines of up to €20,000. Therefore, Failure to declare these movements could result in penalties of around 20 euros for each undeclared item..
Furthermore, if incorrect data is declared or data is omitted, The fine amounts to 150 euros, However, it can increase to 0.5% or 1.5% of the transaction amount. Therefore, the penalty can amount to up to 150% of the amount not paid to the treasuryA thorough review by the Tax Agency.
What taxpayers must remember is that banks send an alert to the tax authorities. If a customer transfers money from their account to a cryptocurrency exchange, the tax authorities will know. This is because all Exchange accounts have a unique code, which is used to track where the money has been sent.
If you know that a taxpayer has invested in cryptocurrencies The tax authorities may send you a request for information, and you will have to prove that you haven't made any profit. If you can't prove this, the tax authorities will impute the profit to you. statement. He will have to pay for it, and he may also face disciplinary proceedings.
Tips for declaring the purchase and sale of cryptocurrencies
With the upcoming Income Tax Return in mind, it is recommended that if the user sells and exchanges their cryptocurrency for another or for goods/services, they should include the gains or losses obtained in the Return.
Cryptocurrencies can generate income through other means. Therefore, mining is considered an economic activity if it involves the use of personal and material resources. It is not subject to VAT because there is no direct payment for the service.
Another piece of advice that taxpayers should keep in mind is that all earnings from staking, for the purpose of obtaining financial returns from cryptocurrencies, must be declared.
