The 2023 Income campaign has already begun and once again cryptocurrencies are one of the hardest to declare. The Treasury has been implementing the changes for several years and on this occasion we learned all the new obligations for 2022 revenue until the last minute.

On April 5, Royal Decree 249/2023, the ministerial order containing all the details regarding the taxation of cryptocurrencies, was published in the BOE. Anyone who owns one of these assets should pay special attention this year (and next year) as some new features are introduced. We will try to summarize what are the main points to consider.

Cryptocurrency boxes. To facilitate the declaration of sale of cryptocurrencies, the Tax Office has added a new special section called 1800-1814 boxes. In these boxes it is necessary to detail all purchase dates and values, as long as the Revenue draft can calculate the profits and losses achieved.

The novelty is not that these purchases or sales need to be declared as they are considered a capital gain or loss. The novelty is that a special section devoted to “Virtual Currencies” has been added.

Boxes 1800-1814 devoted to the declaration of virtual currencies.

A breakdown of all transactions one by one. In this section 1800, entitled ‘Inheritance gains and losses from the transmission or exchange of virtual currencies by individuals’, all buying and selling transactions should be separated individually, but experts recommend grouping equivalent transactions because the schedule limits, among other reasons. up to a maximum of 25 capital gains and losses. And users who do a lot of transactions with cryptocurrencies can have more than 25 transactions.

Expert tax advisers point out that this individualized breakdown will impose more workload on them.

Model 721 is coming (in 2024). It appeared in the summer of last year There is a virtual currency reporting requirement abroad, but it is not yet active for 2023 Income Tax declaration. This is the new Model 721, which replaces the previous Model 720. However, although it was officially announced before, it was decided to postpone its mandatory qualification to January 1, 2024.

Starting next year, the Treasury will require reporting on the balance of virtual currencies located abroad (mainly on exchanges outside Spain), but this year is already active during the period defined as a transition period.

They will be obliged to present “persons and organizations residing in Spain who are the owner, beneficiary, authorized or have the power of disposition of the crypto currency”.

Like Highlights Cris CarrascosaAn expert lawyer for ATH21Cripto warns: “Even if the owner’s status is lost during the year, 721 must be submitted with the date such status is lost” and “it’s better not to be too smart”. by switching crypto to another wallet before the year is out, because the Treasury has already stepped on it”.

Data to be included in 721 include personal data such as name, NIF or the asset protecting the keys, the identity of each cryptocurrency and the balances of each cryptocurrency, as well as its value in Euros.

The sanctions for not filing Form 721 are equivalent to those with Form 720. A fine of €200 will be imposed for not presenting.

There will be no liability below 50,000 Euros in crypto. The Treasury’s obligation to report cryptocurrencies abroad will not apply if they are in small amounts. As explained in section 5d of article 42 of Royal Decree 249/2023:

There will be no obligation to report any virtual currency when the balances valued in euros as of 31 December referred to in “Section 3.c) do not jointly exceed 50,000 euros. If such common limit is exceeded, information on all virtual currencies”.

Staking and mining are also taxed. Besides trading, there are other formulas that need to be declared regarding cryptocurrencies. We’re talking about “staking” and mining. These activities are considered income from movable capital and should be taxed in an equivalent way. Regarding personal income tax, as pointed out by the Cuatrecasas law firm, the percentage should be analyzed on a case-by-case basis.

Treasury gets serious with crypto. For the 2023 campaign, the Tax Office plans to send 328,000 notices to taxpayers dealing with cryptocurrencies, 40% more than last year.

For this 2022 income, all operations will have to be explained one by one, and those abroad in 2024 will be required to be reported. Tax Office director Soledad Fernández explained that at the start of the Income 2023 campaign, there are more and more notifications about cryptocurrencies as they “normally”, “grow exponentially”.

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