The tax authorities are now looking at your cryptocurrencies worldwide: how it affects your tax return and what you need to do
More and more people come to our office with the same concern: “I have cryptocurrencies in exchanges outside Spain, can the Tax Authorities know about it? The answer today leaves no room for doubt: yes, and more and more easily. Since this year, an important international system has come into force that obliges cryptocurrency platforms to identify users, register all their operations and share this information with the tax authorities of different countries. This means that, even if your cryptocurrencies are in a foreign exchange, the information may still end up reaching the Spanish Tax Agency.
The objective of this new regulation is very clear: to prevent cryptocurrencies from being used to hide wealth or undeclared gains. That is why intermediaries must collect data such as the purchase price, the sale value, the profits obtained and the holder’s tax residence. All this is automatically exchanged between tax administrations. In other words, what many once considered difficult to trace is now increasingly controlled and much more transparent to the tax authorities.
In this context, it is essential to understand which transactions with cryptocurrencies must be declared. Not only the classic “buy low and sell high” transaction is taxable, but also the exchange of one cryptocurrency for another, the payment of goods or services with cryptoassets and even certain donations. All these operations can generate gains or losses that must be correctly reflected in the income tax return. Failure to do so can result in penalties, surcharges, interest and even major problems in serious cases.
For this reason, our recommendation is always to act with foresight. It is important to keep an orderly record of your movements, keep reports of the platforms where you operate and make sure that everything is correctly declared. In addition, in many cases it is also advisable to review previous years to check if everything is in order before the Treasury can initiate any proceedings.
At Martínez Caballero Abogados we regularly attend to people who have operated for years with cryptocurrencies, taxpayers who have already received communications from the Tax Agency or those who have moved to another country and need to regularize their situation in Spain. In all these cases we analyze each situation individually, assess the possible options to regularize and accompany the client throughout the process, especially if there is already an open procedure.
If you have cryptocurrencies and you do not know if you are declaring them correctly, if you have received a communication from the Treasury or if you simply want to make sure that your situation is safe, we can help you. At Martínez Caballero Abogados we study your case, explain your obligations clearly and accompany you to avoid unnecessary penalties and protect your interests.
DIANA CABALLERO AGUIRRE
CEO – Founding Partner
M&CAbogados
