Crypto Tax Legislation & Law in Spain

No. Taxation of crypto-assets is based on general principles included in the different tax laws in force within the Spanish legal framework. Due to the above, income or tenancy of crypto-assets is taxed by Personal Income Tax (PIT) or Net Wealth Tax (NWT) by applying the general rules included in the corresponding tax laws. Notwithstanding the above, the Spanish Government recently approved Royal Decree 249/2023, in relation with Law 11/2021, establishing certain obligations of reporting crypto-assets held in Spain and abroad (in a similar way to securities, bank accounts or real estate assets).

Exchange of crypto-assets for FIAT currency is taxed, in general terms, as a capital gain or loss for PIT purposes. Said gain or loss will be included in the PIT saving base, being taxed at rates ranging from 19%-28%. The taxable base will be determined by the difference between the sale proceeds and the acquisition value of the crypto-assets. However, if the taxpayer organises his/her own material and/or human means for carrying out a trading activity, said income could be taxed as income deriving from an economic activity.

Yes, taxation will be the same as the one disclosed in Q2 above.

In general terms, the criterion followed by the General Directorate of Taxes establishes that an individual exchanging/selling crypto-assets for himself/herself will be qualified as a casual trader, while a professional trader will render services such as buying/selling crypto-assets on behalf of third parties or mining. Under this scenario, for PIT purposes professional traders will obtain income deriving from a business activity taxed at general rates ranging from 19%-50%, while casual traders will obtain capital gains taxed at saving rates ranging from 19%-28%.

In general terms, losses generated by a PIT taxpayer from the exchange/sale of crypto-assets could be offset with other capital gains generated in the same fiscal year. The taxable excess, if any, could be offset with a positive net result obtained in said fiscal year from income derived from capital movable assets (e.g. dividends or interests) in a maximum amount of 25% of the taxable positive income. If there are capital losses after said offset, said losses can be offset within the subsequent  4 fiscal years applying the same rules.

Notwithstanding the above, this is not a clear-cut issue and there is a risk of the Spanish Tax Authorities considering that said offset should be limited in certain cases. It is also worth mentioning that the program for the preparation of the FY2022 PIT return established a limitation on the offsetting of capital losses arising from transactions with crypto-assets. This limitation (which derives from an interpretation of the rather debatable criterion of the General Directorate for Taxes set out in its tax binding ruling V1604-18) consisted of the fact that capital losses generated in a financial year may only be offset against any capital gains generated if the assets that have given rise to the loss are not repurchased within a period of 2 months (or 1 year, depending on the type of asset). However, this limitation disappeared – 1 week later – from both the Ministerial Order of 28 March regulating the tax return and the program for preparing the FY2022 tax return. Thus the final criteria of the Spanish Tax Authorities cannot be guaranteed yet.

In general terms, 4 fiscal years.

NFTs are, in general terms, taxed in the same way as crypto-assets. However, a case-by-case analysis should be made since accounting or tax differences could arise under certain circumstances.

In general terms, mining is taxed as an income deriving from an economic activity for PIT purposes. Said income is included in the PIT general base, being taxed at rates ranging from 19%-50%.

In general terms, income obtained from staking is taxed as movable capital income for PIT purposes. Said income is included in the PIT saving base, being taxed at rates ranging from 19%-28%.

No different tax returns are foreseen for said specific activities, but all of them could trigger Corporate Income Tax (CIT) or PIT if any income is obtained. For example:

• any income obtained in case of airdrops or hard forks, or as a consideration from professional activities or for playing games, should be taxed by PIT as a capital gain not deriving from a transfer of assets; said gains are included in the PIT general base, being taxed at general rates ranging from 19%-50%
• farming, lending or yielding are taxed as staking, i.e. as movable capital income for PIT purposes, being taxed at saving rates ranging from 19%-28%.

As disclosed above, in general terms income obtained from crypto-assets, or the main tenancy of such assets, could be taxed using regular Spanish taxes (e.g. PIT, CIT or NWT). Thus no different tax obligations should arise in case of income/tenancy of crypto-assets in comparison with other assets.

Notwithstanding the above, the Spanish Government recently approved a Royal Decree establishing that PIT and CIT taxpayers should disclose (on a yearly basis) certain information related to crypto-assets held in Spain (only applicable for entities or professionals) or abroad if certain requirements are met (mainly when said crypto-assets jointly exceed EUR 50,000). Said information should be disclosed by filing a specific tax return (tax forms 171,172 and 721).

In principle, we see no relevant tax implications different from those described in the questions above. However, certain consequences with regard to VAT or Business Activity Tax could arise from carrying out professional activity with crypto-assets (e.g. mining or sale to third parties).