Taxes on Cryptocurrency in Spain: How, When and How Much You Need to Pay

Due to the yet not fully defined Spanish tax legislation when it comes to new technologies and blockchain, the vast majority of crypto traders don’t know which are exactly their tax obligations. And, for sure, this is a really important issue if you want to avoid the big penalties you can be charged with. 

Do you need to pay tax on cryptocurrency in Spain? Yes, you must pay taxes for your cryptocurrency investments in Spain. And that does not apply only to bitcoin, but to any other coin you are trading with. The Spanish Tax Agency, observing the rise and popularity of this new type of asset, has started to regularize more and more its participation and therefore its tax collection efforts.

In that sense, on the 23rd of October 2020, the Spanish government published a draft law to gain higher control of cryptocurrencies. With it, now you must inform the tax authorities about the possession of any cryptocurrency you may have and any transaction that you make in a very detailed way. And this applies to coins you have both in Spain and any other country in the world. More precisely, you must inform about any cryptocurrency acquisition, transmission, exchange, transfer, collection, or payment made.

Tax filing obligations for resident of Spain – Who must pay Spanish taxes? A guide to taxes in Spain for Residents. 

If you are living and working in Spain, you are liable to pay income taxes on your income and assets and will need to file a Spanish tax return. Whether you pay Spanish taxes on your worldwide income, or Spanish-based income only, depends on your residency status.

To make a Spanish income tax declaration, submission is to be made within the Modelo 100. The tax year in Spain runs from 1 January to 31 December. Eligible residents must file tax returns between 6 April and 30 June of the year following the tax year. There are no extensions on filing tax returns in Spain.

If you’re a resident of Spain, you must pay Spanish tax on your worldwide income. Taxes apply on a progressive scale, although tax deductions exist. If you are a non-resident in Spain, you only pay tax in Spain on Spanish income, typically at a flat rate. This also includes potential income on Spanish property even if you don’t rent out your property. Spanish tax also applies to property ownership, investment interest, and goods and services in Spain.

Taxes in Spain are split between state and regional governments. This means that Spanish tax rates can vary across the country for income tax, property tax, wealth tax, capital gains tax, and inheritance tax in Spain. Furthermore, workers in Spain must contribute to Spanish social security taxes. The Spanish tax year runs from 1 January to 31 December.

Spanish tax for residents – If you have been living in Spain for six months (183 days) or more of the calendar year (not necessarily consecutively) or you have your main vital interests in Spain (for example, your family or business is in Spain), then you are classed as a Spanish resident for tax purposes.

Xerxes Tax and Law