Individuals and companies holding virtual currencies in Spain must report the amount of cryptocurrencies they hold and their value in euros to the tax authority at the end of each financial year. This obligation is also extended to operations carried out with this type of assets, as well as holders of virtual currencies abroad, according to the latest draft of the Royal Decree presented for public information by the Ministry of Finance.
Among other things, the document aims to extend the current regulatory development to the changes introduced late last year in personal income tax, as well as corporate income tax, wealth tax and the income of non-residents, all associated with this type of crypto asset .
Those affected include coin manufacturers, exchange offices, virtual wallets and service providers for securing cryptographic keys on behalf of third parties.
In addition, the innovations that the Ministry of Finance points out in view of the assets located abroad could serve as a guide for the new Model 721 that the Ministry is working on, in which the foundations will be laid as early as 2023 – for exercise 2022 – cryptocurrencies deposited in other countries . This duty falls on the owners, but also on the beneficiaries, agents and proxies.
The text proposed by the Ministry of Finance stipulates that the assets are located abroad “if the person or entity or establishment protecting them by providing services to secure the private cryptographic keys on behalf of third parties”, as well as “for maintenance, safekeeping and to transfer such currencies” is not required to declare personal income taxes or corporate, property or non-resident income taxes.
In order to carry out the valuation in euros, explains the portfolio managed by María Jesús Montero, the regulated companies – regardless of whether they have the assets inside or outside of Spain – take the average price of the assets as of December 31st offered by the main trading platforms . Otherwise, they use commonly used valuation mechanisms that provide a reasonable estimate of the virtual currency’s market value in euros on the same date. “In this context, the price or value used to carry out such an evaluation is stated,” the text reads.
In return, the Treasury Department also requires reporting of the trust currency intended to provide backup, storage or transmission services for cryptocurrencies in the “Balances” section, “as well as its valuation in euros, if the currency differs from the euro”.
In the “Operations” section, the information to be provided to the Tax Administration includes, in turn, the type of movement, the date of the operation and the public keys or public addresses of origin and destination associated with the virtual currencies received or delivered. It is also necessary to record the type and number of purchased, transferred, exchanged or transferred units of virtual currency, the value in euros for which the transaction is carried out and, if applicable, the commissions received and related costs. the person required to provide information.
In parallel, if the transaction does not entirely require a consideration in escrow currency and it is therefore necessary to carry out the valuation of the transaction in euros, the obligated subjects, in turn, take the average price offered by the main platforms on the day the operation was carried out. If this is not possible, the usual evaluation mechanisms are used again.