Bitcoin ATM and taxes on cryptocurrencies in Spain

It's not easy to calculate taxes on any cryptocurrency-related activity in Spain, as the government has recently been implementing new regulations and guidelines for cryptocurrencies in addition to those put forth by the EU. Those living there permanently or seasonally are wondering how difficult it can be. Let's find out!

Spain's cryptocurrency tax spells trouble for many Poles abroad

Some facts about Spain's crypto taxes

Any capital gain (or loss) recorded when a cryptocurrency is sold for fiat or exchanged for another cryptocurrency is considered "savings income" for tax purposes, including gains from using the Bitcoin ATMs
Any such sale of cryptocurrency should be recorded on your personal tax return.
The tax you pay depends on the type of cryptocurrency transaction you make. There are four options in which you can be taxed with cryptocurrencies, these are:

savings taxable income (capital gains tax)
general taxable income
wealth tax
and inheritances

is charged VAT When buying cryptocurrency in Spain, the means of payment according to Article 20 of the VAT Law, so they are exempt.
The Spanish tax year begins on January 1 and ends on December 31. You must file your tax return for the previous tax year by June 30.

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What cryptocurrency regulations are currently in place in Spain?

Part of the Spanish government's attempts to regulate the cryptocurrency market includes the recent passage of an anti-fraud law that aims to track users and assets more effectively, thereby making it easier to curb criminal activity. This law (Law 11/2021 of July 9, 2021)means that it is likely that cryptocurrency exchanges will have to report information about their Spanish customers to the government at some point in 2023.

In addition to this law, on June 5, 2021, the EU's AMLD6 law came into effect, which is of particular importance to any company that interacts with cryptocurrencies in any way, and has more to do with the need to identify customers, such as when those customers buy cryptocurrencies from them.

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Where is a safe place to invest in cryptocurrencies today?

There has been an increase in crypto-related tax audits in Spain, so the issue of calculating and filing taxes is an important one for both investors and companies, with large fines for failing to do so. With the collapse of thepopular U.S. cryptocurrency exchange FTX in 2022, Spanish regulators will no doubt be pleased to see such legislation being implemented.

However, for investors, trusting an exchange is now a bit more difficult (since any of them can take your money or crypto with very little chance of recovering your assets), so the author recommends using one of the more than 40 Bitcoin ATMs around the world of Spain to perform such transactions.

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In Spain, every investor pays tax on cryptocurrencies, including when they use Bitcoin ATMs.

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What are the different crypto taxes in Spain and how can I calculate them?

It is good for investors to understand how cryptocurrencies are taxed in Spain, so that they know what details to note when making any cryptocurrency transaction, as this information may come in handy later when filling out tax returns.

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Here are the various taxes on cryptocurrencies in Spain: income tax, tax on savings income, inheritance and gift tax, and wealth tax. However, Spain's cryptocurrency tax laws are not yet fully formed, so it's not easy to get around them. The main government body dealing with taxes is the Agencia Estatal de Administración Tributaria (AEAT). They define crypto this way: "(...) a digital representation of value that is not issued or guaranteed by a central bank or public authority, is not necessarily linked to a legally established currency and does not have the legal status of currency or money, but is accepted as a means of exchange and can be transferred, stored or sold electronically." Therefore, cryptocurrencies are not treated as currency, but as assets.

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You can read AEAT's tax guide on cryptocurrencies.

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1. tax on savings income / capital gains tax

Every time you dispose of your cryptocurrency, you will have to pay capital gains tax on it. This can include anything from converting it to fiat currency, changing it to another cryptocurrency or simply sending someone your cryptocurrency. The amount you have earned from cryptocurrencies since your first purchase is the amount that will be taxed.

That's why it's important to note down the price of the cryptocurrency when you buy it (plus the fees you paid to buy that cryptocurrency), as well as the price it had when you sold it, so you can calculate the change in value of the cryptocurrency you're getting rid of as accurately as possible. This tax ranges from 19 to 26% and is determined as follows:

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Profits -> Tax rate

Up to EUR 6,000 -> 19%

Profits between €6,000 and €50,000 (up to a maximum of €44,000) -> 21%

Profits between €50,000 and €200,000 (up to €150,000max.) -> 23%

Profits from €200,000 and above -> 26%

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However, capital gains tax on cryptocurrencies is progressive, so you pay 19% on the first €6,000 of profit, then on the next €44,000 you pay 21%, then on the next €150,000 you pay 23%, and any amount above €200,000 will be taxed at a rate of 26%. So if you calculated a profit of €250,000, the last part would be calculated as 26% of €50,000, with each lower level taxed accordingly at the appropriate tax percentage.

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Cryptocurrency tax in Spain is more complicated than in Poland.

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As you can see, this is a tax on any gains or profits made from disposing of a cryptocurrency. If you incur any losses, they are not taxed, but they can be calculated to offset your gains, so if you disposed of the cryptocurrency at a loss, you can deduct this from your profits. If you don't have any profits, these losses have a staggered expiration date of 4 years, so if you record profits at some point while disposing of your cryptocurrency, you can deduct these past losses (as long as they are within 4 years of your profits). However, such losses can offset a maximum of 25% of annual net capital gains.

In Spanish law, the so-called "economic activity" is quite important. For example, if there is something that is your main source of income, you must register it as a self-employment activity.

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Let's take a closer look at some of the activities:

Staking: (specifically, income derived from staking) would normally be taxed according to the table above, as it is considered a return on movable capital.
NFT: in short, if buying and selling NFT is your main occupation, you must register as a freelancer, and all income earned from this "business" would be taxed as general income (see below). If you do this only occasionally, profits from buying or selling NFTs will be calculated as capital gains, so you should refer to the table above.
Crypto Card Cashback Rewards: would be considered the same as betting rewards (i.e., income from moving capital, and thus income to be included in the taxable savings base, as described in the table above). Try to make a note of each time you receive such crypto rewards for using the card, so you can keep track of this when calculating your taxes.
Rewards in "play to earn" games: Again, if this is your main occupation, you must register it as self-employment, and the rewards will be taxed as "business" income. You probably just play sometimes, and in this case any rewards are calculated the same as rewards for staking or crypto-cards (i.e., returns on moving capital), unless the tokens earned came from another player's wallet, in which case it would be equity earned.

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2. general income tax (impuesto sobre la renta de las personas físicas)

This is more of a "gray area" than a capital gains tax, as the AEAT rules are still unclear, but in general you can take into account any additional income you may have earned from cryptocurrencies. These can come from profits from cryptocurrency mining, liquidity mining on DEX, farming, any payments made to you in the form of cryptocurrencies or cryptocurrencies received in airdrops. As a very general rule of thumb, whenever you receive any cryptocurrency (but not from buying it), you may be taxed on its total value according to its market value in euros at the time you receive it, so it is advisable to make a note of these market prices when you receive cryptocurrency, as it may be more difficult to check later.

Income tax in Spain is progressive, like capital gains tax, but it also depends on where you live in Spain (according to your autonomous community - this information is for you). You can read the article below , to calculate your personal income tax (PIT) rates, or see the table below for a general overview of general income tax rates for cryptocurrencies: General taxable income Tax rate Up to €12,450 19

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Taxable income -> tax amount

Up to EUR 12450 -> 19%
Between 12450 and 20200 EUR-> 24%
Between €20,200 and €35,200 -> 30%
Between €35,200 and €60,000 -> 37%
Between €60,000 and €300,000 -> 45%
Above EUR 300,000 -> 47%

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Other cases where these rates apply:

Airbrushing: When you receive free cryptocurrencies from any source, it is considered a donation and calculated on the general tax base (see table above for rates) and should be included in section "304" because it falls under "capital gains and losses that do not arise from the transfer of capital items'.
Mining: If you are engaged in this activity, you must register as self-employed. Then any profits made would be subject to income tax.

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3. property tax

In some areas of Spain (e.g. Andalucía,Comunitat Valenciana, Barcelona) there is a wealth tax, and cryptocurrency ownership is included in the total wealth, which is calculated at the end of the tax year for Spanish residents. In addition, all Spanish taxpayers must pay wealth tax if their assets exceed €2 million. It is easy to exceed this amount if you are a Bitcoin ATMs user in Madrid or Barcelona.

To calculate wealth tax, you must calculate the value of all your cryptocurrencies (as of December 31 of the tax year for which you are calculating) and pay the appropriate tax rate. In general, if your total wealth (of which crypto will only be a part) exceeds €, you will have to pay wealth tax. This is quite a controversial topic in Spain, and some autonomous communities have announced that they will put an end to it in their region. The Spanish wealth tax is again progressively taxed and ranges from 0.2% to 4%.

See the relevant websites for your autonomous region. Madrid is the only region where wealth tax is not implemented, but even so, if you have more than 2 million euros in assets, you still need to file a wealth tax declaration so the government knows how much you own. If you want to find a Bitcoin ATM in the Madrid area, you can find locations here.

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4. gift and inheritance tax Taxes

this one is the same as income tax, but you are only subject to tax if you inherit any cryptocurrency. The rate will again depend on where you live in Spain and can range from 7% all the way up to 36.5%.

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What is not taxable for cryptocurrency in Spain?

Non-taxable events include: buying cryptocurrency, holding it in a wallet, or transferring it from one wallet to another. It's only when it leaves your ownership that it's considered a taxable event, but this comes with its own issues of De-Fi (decentralized finance), yield farming, and liquidity extraction, which are difficult to define and therefore taxable .

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How are Spanish tax reports prepared?

Income and capital gains can be reported to AEAT through your annual tax return. In order to report them as a Spanish tax resident, you need to fill out the Modelo 100, which you can fill out online after calculating your crypto tax, which can be done using crypto tax calculator apps such as those listed here. There, you need to go to the section "Capital gains and losses resulting from transfers of other assets" and enter "0" in the "1626" field, as it stands for cryptocurrencies. On the other hand, wealth tax is reported using Modelo 714.

A new Modelo 721 form is currently being developed that will deal specifically with cryptocurrencies, but it is not yet ready - it will probably be introduced in 2023.

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What is Modelo 720 - foreign assets statement?

If you, as a Spanish citizen, own any foreign assets, you sometimes have to declare them in the M720 form. However, in the case of crypto, there is no obligation (for now!) to declare your crypto assets. On the other hand, you must include them in your wealth tax calculations, as described above.

How to register for Spanish income tax forms?

There are three options: investors, self-employed and employees.

Investors - most of us are investors because this includes buying cryptocurrencies in order to potentially sell them later at a higher price, which would generate capital gains for you and thus be subject to personal income tax.
Self-employed - Applies to people whose salary is entirely taken by themselves (e.g. cryptocurrency miners), but are taxed in the same way as investors.
Employees - If you work for a company, Spanish law allows you to receive 30% of your salary in commodities (i.e., cryptocurrencies), which would be marked as labor income and valued at the value on the day you receive them. When you sell this cryptocurrency, you would be taxed the same as an investor.

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Traders are not considered self-employed or freelancers, as they manage their own finances and do not offer any goods (e.g. NFT) or services to third parties.

What accounting method is used in Spain to calculate taxes on cryptocurrencies?

In Spain, stock valuation is calculated using the FIFO (Spanish: PEPS) (first-in-first-out) accounting method, so this applies to capital gains on cryptocurrencies. This means that when you sell a cryptocurrency, even though you may have bought it at multiple prices, in order to calculate the cost basis (the market value of the token when you received it plus any other fees paid) you therefore do according to the price the first time you added the token to your wallet.

You then compare it to the current market value of that token to calculate any gains. Basically, you calculate the token's appreciation (or not) based on the price it had when you first added it to your portfolio. This method has its advantages and disadvantages.

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When is the deadline for filing tax returns in Spain?

The Spanish tax year is the same as the regular year, which begins on January 1 and ends on December 31, but Spanish citizens have until June 30 to file their tax returns for the previous tax year.

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A good way to buy or sell cryptocurrencies in Spain: bitcoin ATMs

A great way to buy or even sell cryptocurrencies is to use Bitcoin ATMs. Although in Spain there is a requirement for identification when using these machines, this data is never collected for sharing with the government, but only to identify possible criminal activity such as money laundering or terrorist financing. For this purpose, the author recommends using the services of some operators Bitcoin ATMs, as they are reliable (good customer service) and offer very good fees (sometimes even 0%) when buying or selling cryptocurrencies. You can find a list of such Bitcoin ATMs on the subpage Bitcoin ATM Map. You can register on their social media to find out when these offers are available.

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Sources:

About the Author

Andrzej Kotnicki

Bitcoin enthusiast, user of Bitcoin ATMs. He is interested in online security. Believes that Bitcoin payments and is the path to freedom, as long as we watch out for scammers in the early stages of its development.

April 2, 2022

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