Sunday, January 29

The Treasury will short-tie only Spanish cryptocurrency platforms


The anti-fraud law short-ties the capital gains derived from transactions with crypto assets. But only from Spanish platforms or those with permanent establishments in the homeland. The measure makes perfect sense, but it assumes that clients will have the capacity to make regulatory arbitration with firms without offices in the country, according to tax sources. The Chinese Binance, the Hong Kong Crypto.com and the American Coinbase will not have to send a piece of paper to the Tax Agency. Instead, Bit2Me and 2gether users will be controlled to the millimeter.

The revaluation of bitcoin is dizzying. From the 800 dollars at which the unit was paid at the end of 2016, it has gone to the current more than 47,000 dollars, and even reached a record close to 68,000 dollars in November (see graph). Capital gains in five years would now be around 5,800%. And these must be taxed as capital gains for the investor, who must integrate them into savings income.

Spaniards must declare any capital gains – when they sell the cryptocurrency in question – in the Personal Income Tax (IRPF), and they will pay taxes on them between 19%, for profits of up to 6,000 euros, and 26%, for those over 200,000 euros. In the case of capital gains from 6,001 to 50,000 euros, the rate will be 21%, and from 50,001 to 199,999 euros, 23%.

The fact is that, until now, and unlike what happens with banks and financial intermediaries, such as brokers, it was the power of citizens to comply with the treasury. While the Spanish banks send the tax administration all the information on stock transactions likely to have generated capital gains, until now there was no obligation on the part of cryptocurrency intermediaries. The situation was absolutely abnormal.

The rule specifies that the platforms will send the data of the balances in virtual currencies, as well as any operation related to them: acquisition, transmission, exchange, transfer, collections and payments. This same obligation extends to those who make initial offers of new virtual currencies. Clients will also benefit from the ability to offset losses. If the losses exceed the capital gains, the former may be offset in the income tax return for the following four years.

The regulation in force specifies that entities residing in Spain and permanent establishments in the country of foreign entities must inform the Tax Agency. That is, the platforms that have establishments or offices of some kind. But this does not occur in most of the providers of these services, exclusively virtual, such as the aforementioned Binance, Crypto.com and Coinbase.

same obligation

The fact that foreign platforms do not inform the Tax Agency does not exempt, of course, that their clients declare with absolute accuracy their possible capital gains or losses in personal income tax. Although, in some cases it is also difficult for investors to have clear information about these data, due to the lack of a transparent protocol.

In the anti-fraud law it remains black on white: “The obligation to report on virtual currencies located abroad is introduced.” Already in the income statements made in 2019, the Tax Agency sent some 15,000 notices about transactions with cryptocurrencies. It warned citizens after learning of its operations thanks to the National Fraud Investigation Office (ONIF) and the control campaign it launched in 2018, when it required information from 60 firms involved in the sale of digital currency. He demanded data from banks, financial intermediaries, exchange houses and companies that accept this type of payment. The Tax Agency supplemented this information with that transferred by authorities from other countries.

In fact, the anti-fraud law already includes fines in the event that citizens do not report correctly if they have the coins in foreign firms. The sanction will consist of a fixed fine of 5,000 euros for each data of each virtual currency that should have been included in the declaration or had been provided incomplete, inaccurate or false, with a minimum of 10,000 euros.

Treasury prioritizes declaring in any case. The punishment is much less if it is reported, even if it is out of time. If so, but it is not the Tax Agency that requires the information, the penalty will be 100 euros for each piece of data or set of them with a minimum of 1,500 euros.

Pending regulatory development

  • Waiting for more rules. It is true that the obligation to inform the Tax Agency must be detailed in the regulations. And this development has not yet occurred. The key date will start on April 6, when the 2021 income campaign begins, which will last until June 30.
  • Roadmap. The logical thing is that, before the personal income tax campaign begins, the instructions are available in detail and, of course, that they have entered into force. Only in this way will Spanish firms or firms with a permanent establishment in the country that operate crypto assets have the capacity to send the required information in a timely manner to the Treasury.
  • Danger. Tax sources consider that the deadlines are very tight and open the door so that the affected firms do not have to report neither the balances nor the capital gains of the past year during this year. Although there are still three months to go and it is possible that the mandatory regulatory development on this issue will take place.



cincodias.elpais.com