Friday, February 3

Tribune | The cryptoeconomics of ‘real estate’: the new transactions

The already famous chain of blocks blockchain is assuming a true technological revolution comparable to the creation of the Internet. It is drastically transforming everything and it is already doing so. It is the technology that resides behind cryptocurrencies and that, in addition, offers other multiple applications, which provide a new legal-technical security hitherto unknown (see the smartcontracts). This is the new reality: the crypto economy.

Gone are the times when cryptocurrencies were considered only a way of laundering money from illicit activities. Today we find a large critical mass of investors who have nothing to do with these fraudulent origins, among which young centennials stand out, as evidenced by the latest studies carried out by INVERCO (Association of Collective Investment Institutions and Pension Funds).

These digital currencies, despite not being legal tender and being outside the control of governments and central banks, are intangible digital assets that constitute a true means of payment. It is defined in these terms by the Judgment of the 5th Chamber of the Court of Justice of the European Union, of October 22, 2015, in case C-264/14, Hedqvist, which estimated the bitcoin as a means of payment, setting a precedent on its nature and consequently, being accepted in all member states.

Our legislation, in the recent Law 11/2021 of July 9, on measures to prevent and fight tax fraud, confirms cryptocurrencies as “virtual currency”. Among other modifications made to the tax regulations, the aforementioned law introduces as obligated subjects the providers of electronic wallet change of custody services, wallets, and providers of virtual currency exchange services or exchanges. Likewise, it includes information obligations for taxpayers and companies that manage and operate with cryptocurrencies.

At the European level, it is expected that the MICA regulation will be approved at the beginning of next year (Markets In Crypto-Assets) relating to cryptoactive markets, amending Directive (EU) 2019/1937. This regulatory novelty would mean a paradigm shift since it promotes the development of cryptoactive markets and provides legal certainty to investors and consumers in the EU.

Faced with the fear of investing in cryptocurrencies, mainly due to their extreme volatility and complexity, as revealed by the CNMV itself and the Bank of Spain in their statement dated February 9, 2021, there are stablecoins or “stable currencies”. These are some tokens that avoid the risk of a collapse in value, since they are associated with the behavior of a fiat currency or tangible assets and are supported and recognized by governments as such. Take the USDT as an example.

This new investment fever means that a high percentage of the profits obtained from crypto assets seek a physical materialization of the same through the acquisition of real estate with the virtual currencies themselves. Therefore, we explain how to do it with total transparency and security with the following roadmap.

First of all, in order to avoid any type of speculation or tax fraud, the buyer must prove and certify the legal origin of their funds with which they acquired the cryptocurrencies.

Added to the above is the need to set the value of the property in euros in the deed, as well as the value of the digital currency used with fiat money at the time of the transaction, the day and time the operation is carried out and the exchange rate used to know its value in euros, including capturing it as an annex.

Said value will be the element that sets both the tax base for the calculation of ITPAJD and VAT (if the purchase of a first-transmission property is involved), as well as IRPF, whose gain or loss will be calculated based on the value it had. the cryptocurrency at the time of acquisition. However, it must be borne in mind that it is legally articulated as an exchange of two goods, with the taxation being higher than that of the traditional sale.

With regard to the so-called capital gain, you can choose to calculate it using the cadastral value at the time of the transfer or by considering the difference between the purchase value and the sale value.

At Fuster-Fabra Abogados, we are committed to regularizing and normalizing the new crypto economy, as is already being done in some states, where its use as legal tender is already allowed, while at the same time they issue their own cryptocurrencies. This would provide greater legal certainty and transparency, favoring agile and global transactions 24 hours a day, 365 days a year, thereby generating greater activity and, therefore, greater wealth.

Adriano Ortiz Maillo, partner of Fuster-Fabra