Renta 2022: How to declare cryptocurrencies

Cryptocurrencies physical wallets Minar 2022

The Renta 2021 campaign has already started, and surely more than one taxpayer has the doubt of how they have to declare their cryptocurrencies when accounting with the Treasury.

Hacienda has included an exclusive section for cryptocurrencies in the Renta 2021 campaign

Well, this year, the Treasury has included a new exclusive section in which the declaration of cryptocurrencies is carried out“Capital gains and losses derived from the transfer of other capital items”, which is located from box 1624 onwards. This will help to have a greater control and knowledge of how many cryptos are circulating in our country.

Anyway, the small investor still doesn’t know well how to declare his cryptocurrencies. That is why Coinmotion has created a decalogue to promote training and knowledge about the taxation of cryptocurrencies. These are its main conclusions, which will help the taxpayer who invests in cryptocurrencies:

should I declare my cryptocurrencies?

Taxpayers with earned income of less than €22,000 per year, or less than €14,000 per year from more than one payer are not required to file the IRPF return. However, those investors with incomes lower than those indicated above if they obtained gains from cryptocurrencies, added to other incomes, that exceeded 1,600 euros jointly in 2021, or losses of more than 500 euros, would be obliged to file the return for this campaign.

is VAT due on the purchase or sale of cryptocurrencies?

No. The sale and purchase of cryptocurrencies is exempt from VAT payment because the AEAT considers bitcoin as an intangible good that can be used as a means of payment and transactions with cryptocurrencies as transactions with intangible goods.

what happens if I have my cryptocurrencies in a virtual wallet and I do not carry out any operations?

The AEAT understands that virtual wallets have the consideration of current accounts so as long as they are only deposited and no operation is made with them, they are not taxed.

Form 720. And forms 172, 173 and 721 on cryptocurrencies, what are they?

The Tax Agency has informed that information on cryptocurrencies should not be incorporated in the 2021 Model 720 that refers to the informative declaration of assets abroad. The novelty is that the Treasury is preparing the new models 721, 172 and 173 for the declaration of cryptocurrencies.

Mani Thawani, the crypto advisor to the Spanish-speaking community

We could say that Model 721 is like a “counterpart” to the current 720. In this new model it is also the owners themselves who are obliged to file it. This declaration is merely informative.

Model 172 individuals are obliged to declare the balances they have in cryptocurrencies and companies those of their customers, in addition to the identification of the owners of the same.

if I convert bitcoins into ethers or vice versa should I be taxed?

When an exchange of cryptocurrencies is made we will have to be taxed on the profit or loss generated, calculated by subtracting from the acquisition value of the good delivered the higher of the following 2 values: the market value of the good delivered or that of the good received.

how are the operations carried out with cryptocurrencies taxed in IRPF?

At the moment in which we convert a cryptocurrency into FIAT currency or another cryptocurrency, an alteration in the value of our patrimony takes place that will generate a loss or a patrimonial gain, which has to be declared in IRPF, incorporating it in the section of losses and patrimonial gains of the savings taxable base. This savings base is taxed as follows: 19% for the first 6,000 euros; 21% for the base bracket between 6,000 and 50,000 euros; 23% for the bracket exceeding 50,000 euros; and from 2021, 26% for the bracket exceeding 200,000 euros.

how does the AEAT regulate cryptocurrency mining?

Cryptocurrency mining is considered by the AEAT as an economic activity. As a consequence of this regulation, the amounts received for mining will be declared in Personal Income Tax, as income derived from the economic activity exercised, calculated on the basis of the market price of the day they were received. Expenses derived from the exercise of the activity can also be deducted from this income. Provided that it can be demonstrated that they are necessary to obtain the income.

As to whether or not this consideration is subject to VAT tax, the AEAT establishes that as cryptocurrencies are automatically generated by the network and no recipient of the mining activity can be identified, there is no direct relationship between service rendered and consideration received so it establishes that this activity is not subject to VAT.

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