Understanding Cryptocurrency Taxation
Owning cryptocurrencies? This guide is essential for you as we explain everything about declaring crypto assets in your tax return.
With cryptocurrencies becoming increasingly common in daily life, many wonder: Do I need to declare my Bitcoins? What if I only own a small amount? The answer is clear: Yes, even minor holdings must be declared. This article covers when and how to declare cryptocurrencies, which tax forms to use, and the consequences of non-compliance.
When Must You Declare Cryptocurrencies in Spain?
Any activity involving cryptocurrencies—buying, selling, exchanging, or converting (even crypto-to-crypto)—generates capital gains or losses, which must be included in your Income Tax Return (IRPF).
Minimum threshold? From the first transaction that results in a gain (or loss). There’s no exempt amount. If you earned €5, it must be declared.
💡 Example: You bought Ethereum for €100 and sold it for €150. The €50 profit must be declared.
Common Scenarios:
- ✅ Buy and hold (HODL): No declaration required.
- 💰 Sell or trade: Declare as capital gains/losses.
- 🔒 Staking or airdrops: Taxable as income.
- 🛒 Pay with crypto: Treated as a sale—tax applies.
- 👛 Wallets (hot/cold): Declare if income is generated.
- ⛏️ Mining: PoW requires self-employment registration; PoS taxed as capital income.
Cryptocurrencies are taxed on worldwide income. Whether cashed out or traded in DeFi, all gains must be declared.
FIFO Method: The Key to Crypto Taxation
To declare cryptocurrencies, use the FIFO method (First In, First Out). This ensures accurate calculation of gains/losses when assets are bought at different times.
Formula:
The first assets purchased are the first considered when sold.
Calculate gains as:
Sale value – Purchase value – fees
Step-by-Step Guide to Declaring Cryptocurrencies
Follow these steps to include crypto transactions in your tax return:
- Access Renta Web: Log in via the Spanish Tax Agency’s portal.
- Select "Capital Gains/Losses": Navigate to box 1800.
- Choose "Virtual Currencies".
Enter Details per Transaction:
- Cryptocurrency name (e.g., BTC).
- Transaction type (sale/trade).
- Dates of purchase/sale.
- Values (including fees).
- Repeat for All Transactions.
- Review and Submit.
2025 Tax Rates for Cryptocurrencies (IRPF)
Cryptocurrencies are taxed as capital gains under IRPF’s savings bracket. Rates are progressive:
| Gain Bracket | Tax Rate |
|---|---|
| €0–6,000 | 19% |
| €6,001–50,000 | 21% |
| €50,001–200,000 | 23% |
| €200,001–300,000 | 27% |
| €300,000+ | 28% |
Example: €80,000 gain = €17,280 tax.
Consequences of Non-Declaration
- IRPF non-declaration: Penalties, surcharges, and interest.
- Modelo 721 omission: Fines up to €10,000.
- Increased scrutiny: Spanish tax authorities actively track crypto transactions.
Proactively declare to avoid penalties. Hacienda allows voluntary corrections.
Key Tax Models for Crypto Holders
- Modelo 721: Declare foreign-held crypto if >€50,000 (due March 31).
- Modelo 172: Filed by platforms for custodial wallets.
- Modelo 173: Filed by exchanges for transaction intermediation.
FAQs
Q1: What if I don’t declare crypto?
A: Penalties range from 50–100% of unpaid tax, plus possible audits.
Q2: Do miners pay taxes?
A: Yes—PoW miners register as self-employed; PoS taxed as capital income.
Q3: How do I know if I must declare?
A: Declare if you’ve traded, earned, or sold crypto (excluding pure HODLing).
Q4: Can crypto traders contribute to Social Security?
A: Yes, if classified as a professional activity.
Summary
- Declare all gains/losses in IRPF.
- Foreign-held crypto >€50,000 requires Modelo 721.
- Use FIFO for calculations.
- Stay compliant to avoid fines.
Simplify your taxes—declare accurately and on time.