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TAXES

How is crypto taxed in Spain?

Cryptocurrencies are becoming more and more popular in Spain and recently the government as been cracking down, enforcing tax controls and the declaration of crypto assets, but exactly how are they taxed?

Published: 15 March 2024 09:57 CET
How is crypto taxed in Spain?
How does Spain tax crypto assets? Photo: Karolina Grabowska / Pexels

If you live in Spain or a non-resident and have cryptocurrencies in Spain, it’s important to find out the government legislation on these virtual coins, so that you’re properly prepared, know to declare them and find out how much you’ll be taxed on them. 

Last week we wrote an article about Modelo 721, Spain’s new form for declaring crypto assets, which is due before March 31st 2024. This is an informative declaration only. You will not have to pay any tax because of it, but that doesn’t mean that cryptocurrencies aren’t taxed in Spain.

Are cryptocurrencies taxed in Spain?

Yes, all crypto coins are subject to tax in Spain, no matter what type they are, whether that’s Bitcoin, Ethereum, Polkadot, Litecoin or any one of the thousands of other ones.

You will be expected to pay tax on cryptocurrencies only when you trade them or make gains or losses.

Law 10/2010 on virtual currency, also called cryptocurrency, is considered for tax purposes as “an intangible asset, computable by units or fractions of units, which is not legal tender, but is used as means of payment as it can be exchanged for other goods, including other virtual currencies, rights or services if accepted by the person or entity that transmits the good or right or provides the service”.

If you are trading crypto coins for a personal investment, you will be subject to personal income tax, in the same way that you’re taxed on other profits from savings and investing.

READ ALSO: Do I really need to declare foreign assets to Spain’s taxman by March 31st 2024?

How much are crypto coins taxed in Spain?

Capital gains from trading cryptocurrencies are subject to taxes between 19 and 28 percent, depending on how much you earn. These are the rates.

  • From €0 to €6,000: 19 percent
  • From €6,000 to €50,000: 21 percent
  • More than €50,000: 23 percent
  • More than €200,000: 27 percent
  • From €300,000 upwards: 28 percent

Remember you will only be taxed on the gains you make. This is worked out by taking the amount you sold your crypto coins for minus the amount you bought them for in the first place.

Let’s say, for example, you made a gain of €60,000. In this case, you will pay 19 percent on the first €6,000, 21 percent for the next €44,000, and 23 percent on the remaining part of the €60,000.

This means you will pay a total of €12,940 tax on €60,000 profit, leaving you with €47,060.

You will also be taxed on gains you make from trading one cryptocurrency against one another. When you sell that coin you traded for a further profit, you will be taxed again on the second gain. 

Crypto as a business

The above amounts equal how much you’ll pay if you’re an individual, but if you’re making profits as a business or you are indeed mining crypto currencies you will be charged from 19 to 47 percent tax.

It’s not yet clear how much you will be taxed if you receive crypto by airdrop, but legal experts expect this also to be taxed between 19 and 47 percent.

How do you declare crypto earnings?

Any profit you make from cryptocurrencies must be declared during the annual declaración de la renta or income tax form, which is filed usually before the end of June each year for the previous year. 

You will report all your crypto transactions for buying and selling during that year. You can usually download a record of these from the crypto exchange you bought and sold them from.

If you made any losses you can also choose to report these. In certain cases, this may be used to offset any gains you make over the next four years.

Wealth tax

It’s important to be aware that cryptocurrencies are included in the wealth tax declaration on large fortunes. This means that the value of your crypto coins will be added to the value of your other worldwide assets including property, savings, money in your bank accounts etc.

It’s an annual tax, payable on the total net value of your assets held on December 31st of the previous year and is only applicable to those with a net wealth of over €3 million.

Rates and rules vary slightly depending on where you live in Spain, so it’s important to contact a tax professional to find out the laws in your region.

How do the Spanish tax authorities know if I have cryptocurrencies?

If you purchased your cryptocurrencies on a Spanish exchange, they will have been obliged to provide information to the Treasury about their users, so most likely they will already know. 

If you purchased crypto through a foreign exchange, such as the well-known Binance, it is likely that they will have also given your details to the Spanish tax authorities as they are inscribed with the Bank of Spain. 

Currently, there are around 70 exchanges inscribed with the Bank of Spain including Binance, Bit2Me, BitPanda, Criptan, Bitbase and Bitonovo. You can find a full list of them here if you scroll to the bottom. 

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For members

TAXES

Can you pay taxes in Spain with a foreign bank account?

Many foreigners have tax obligations in Spain but might not have a Spanish bank account to pay them from. Changes by Spain's tax authorities might just make it easier, depending on your circumstances.

Published: 3 May 2024 09:01 CEST
Can you pay taxes in Spain with a foreign bank account?

Navigating the ins and outs of the Spanish tax system can be a little daunting at times. That’s why many people choose to pay for a gestor to handle it all for them.

But for many foreigners in Spain, especially those with property in the country but who aren’t resident, figuring out when and how to pay your taxes can be extra complicated, especially if you don’t speak Spanish.

READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one

This was compounded by the fact that, for many years, you couldn’t pay Spanish taxes from a foreign bank account. As such, many people were forced to open a Spanish bank account for the sole purpose of paying tax.

Can you pay taxes in Spain with a foreign bank account?

Fortunately, it’s no longer like that. From February 1st 2024, the tax authorities in Spain started allowing tax payments via direct debit from any bank account within the SEPA area, removing the need for a Spanish bank account.

So, in short, yes, you can pay your Spanish taxes with a foreign bank account — depending on the country in which the account is based.

What is SEPA?

SEPA stands for Single Euro Payments Area is a basically an integrated bank transfer system. SEPA includes all the EU members states, plus those in the EFTA (Iceland, Norway, Liechtenstein and Switzerland). The UK is also still member of the SEPA area, despite Brexit.

Before the change, you could only pay your taxes in Spanish via banks approved by the tax authorities.

READ ALSO: Spanish tax returns: A handy guide for foreigners

VAT and tax experts Marosavat explain that under the previous rules, “direct debit [was] only available when the taxpayer’s bank account belongs to a bank entity cooperating with the Spanish tax authorities. This requirement impose[d] an important restriction when using direct debit as a payment method, especially for foreign taxpayers.”

But slowly, the Spanish tax authorities have eased the rules and made it easier for foreign businesses and tax payers to pay their tax from abroad. First, in March 2021, the rules were relaxed for foreign businesses with tax obligations in Spain. 

Then from July 2023 foreign accounts were approved for deferment and split applications of tax debt, and from February 2024 for regular tax payments.

Following the changes, Marosavat says, “the payments will still be processed through a cooperating bank entity, which communicates with the taxpayer’s bank entity. In consequence, all commissions and bank expenses related to the procedure will be passed on by the tax administration to the taxpayer.”

According to Spain’s Agencia Tributaria website, which you can find an English language version of here:

  • Payments are allowed for those who do not have an open account in any collaborating entity in state collection management.　

  • It is especially intended for use by those who pay their debts from abroad.　

  • It can be done by both natural persons and legal entities.　

  • The payment will have releasing effects on the date of receipt and entry of the transfer. 　

Non-resident property owners

This is particularly welcome news for second home owners in Spain, many of whom are non-resident and manage their properties from abroad for most of the year. 

According to IberianTax, by extending tax payments to the wider SEPA area, “property owners can now continue to use their home country’s bank accounts or accounts from other SEPA countries to make tax payments towards their taxes. This change simplifies the process and alleviates the burden of setting up a separate Spanish bank unnecessarily.”

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