tax on bitcoin profits in spain (and other EU countries)?

[Serpens66]

Hi

sorry for writing in english here, but it is hard to know in english section who is from spain and who not.

I'm from germany and would like to know how private bitcoin profits are taxed in spain .
Just the profits from normal trading on exchanges and holding coins not longer then one year.

In germany it is a "private sale" and the profits are added to your income, except you holded the coins one year or more.
How is it in spain ?
Do you know how the tax is in other countries? I would like to gather information how tax situation is in european countries.

Regards,
Serpens66

(thread was moved out of spanish section...)

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[Shawshank]

I'm from germany and would like to know how private bitcoin profits are taxed in spain .
Just the profits from normal trading on exchanges and holding coins not longer then one year.

In germany it is a "private sale" and the profits are added to your income, except you holded the coins one year or more.
How is it in spain ?

In Spain the profits for selling bitcoins which you have kept for less than one year are added to your income and taxed as such. All those profits would go to the "base general".

You can find the rates that apply here:
https://www.rankia.com/blog/irpf-declaracion-renta/3527053-cuales-son-tramos-irpf

Tabla Tramos IRPF 2017
Base liquidable general   Tipo impositivo 2016
Desde   Hasta   
0€             12.450€            19%
12.450€    20.200€             24%
20.200€    35.200€             30%
35.200€    60.000€             37%
60.000€    -                        45%

EDIT: There may be some differences in the table of the "base general" depending on your "comunidad autónoma". The table above for the "base general" applies to most of Spain, including Madrid. However, Barcelona may be approximately 2% more expensive.


If you keep them for more than one year, the table that applies is called "base del ahorro". For more than one year:
http://www.expansion.com/economia/2017/01/12/58760535e5fdea8b628b4609.html

Desde       Hasta               Tipo impositivo 2017
0€             6.000€            19%
6.000€      50.000€           21%
50.000€    -                      23%


I am not an expert in finance but I think it works that way.

[Serpens66]

thank you very much

[pharesim]

Hey Serpens66,

I moved from Germany to Spain and just got into the tax issue too. As far as I'm aware there's no 1 year differentiation here any more. Trading profits always count as savings income, so the base del ahorro (max 23%) applies, no matter how long you held.

Sources:
http://www.bolsamania.com/declaracion-impuestos-renta/como-tributan-los-bitcoins-en-la-renta/
https://noticias.infocif.es/noticia/tributacion-de-los-bitcoins

[DOMAINBROKER]

in some countries in carribean , you dont pay any tax.

[darkangel11]

Hey Serpens66,

I moved from Germany to Spain and just got into the tax issue too. As far as I'm aware there's no 1 year differentiation here any more. Trading profits always count as savings income, so the base del ahorro (max 23%) applies, no matter how long you held.

Sources:
http://www.bolsamania.com/declaracion-impuestos-renta/como-tributan-los-bitcoins-en-la-renta/
https://noticias.infocif.es/noticia/tributacion-de-los-bitcoins

They are getting greedy it seems. Someone noticed the increased value and rising popularity and pushed through a "better" option.
"Look, those investors are now going to have a lot of money, why lose an opportunity to get some more cash into our budget?"

Also I'm amazed that they have such high taxes for high income. 45% tax? WTF? It saddens me that Spain is ruled by socialists.

[Amph]

the majority of countries in europe did not recognized bitcoin properly, and they still seems to ignore it, here in italy we don't have any regulation about bitcoin, and also appear to be no taxes to pay on capital gain unless you go above a threshold

i suspect other country just apply the usual capital gain when you trade, and for mining you can go ahead and ignore anything as long you don't convert, if you convert just declare what yo get in a year to avoid trouble

[FriendlyAlliance]

the majority of countries in europe did not recognized bitcoin properly, and they still seems to ignore it, here in italy we don't have any regulation about bitcoin, and also appear to be no taxes to pay on capital gain unless you go above a threshold

i suspect other country just apply the usual capital gain when you trade, and for mining you can go ahead and ignore anything as long you don't convert, if you convert just declare what yo get in a year to avoid trouble

Hi, do you have any idea what is this "above a threshold" percentage in Italy exactly?

Non-regulated environment sounds interesting to me in short term (i.e. year 2018)!

[FriendlyAlliance]

If you change from Bitcoin to another virtual currency
...
In this case taxes would have to be paid for the profits of the operation, as there is a change in equity. Again, the difference between the value of buy and sell will be taken into account.

If this is true, being tax compliant in Spain becomes a hell for an active trader.

Strangely it contradicts somewhat with:

Bitcoins operate through virtual wallets, which is where these virtual coins are stored. From a point of view of the taxation of the virtual currencies, these have no real value until you convert them to a national currency, that is, to euros in the Spanish case.

No real value before conversion to Euros, but liable to taxation in change of equity between cryptos.
I know some other European countries agreeing with the "no real money before converted" thinking, but sane enough not to say you need to announce profits trading between BTC/altcoin pairs. Can someone confirm this schizophrenic ruling? How in the world can they enforce it?

_{Quotes Chrome translated from this source:
http://www.bolsamania.com/declaracion-impuestos-renta/como-tributan-los-bitcoins-en-la-renta/}

[Don Pedro Dinero]

I'm from germany and would like to know how private bitcoin profits are taxed in spain .
Just the profits from normal trading on exchanges and holding coins not longer then one year.

In germany it is a "private sale" and the profits are added to your income, except you holded the coins one year or more.
How is it in spain ?

In Spain the profits for selling bitcoins which you have kept for less than one year are added to your income and taxed as such. All those profits would go to the "base general".

You can find the rates that apply here:
https://www.rankia.com/blog/irpf-declaracion-renta/3527053-cuales-son-tramos-irpf

Tabla Tramos IRPF 2017
Base liquidable general   Tipo impositivo 2016
Desde   Hasta   
0€             12.450€            19%
12.450€    20.200€             24%
20.200€    35.200€             30%
35.200€    60.000€             37%
60.000€    -                        45%

EDIT: There may be some differences in the table of the "base general" depending on your "comunidad autónoma". The table above for the "base general" applies to most of Spain, including Madrid. However, Barcelona may be approximately 2% more expensive.


If you keep them for more than one year, the table that applies is called "base del ahorro". For more than one year:
http://www.expansion.com/economia/2017/01/12/58760535e5fdea8b628b4609.html

Desde       Hasta               Tipo impositivo 2017
0€             6.000€            19%
6.000€      50.000€           21%
50.000€    -                      23%


I am not an expert in finance but I think it works that way.

Hey Serpens66,

I moved from Germany to Spain and just got into the tax issue too. As far as I'm aware there's no 1 year differentiation here any more. Trading profits always count as savings income, so the base del ahorro (max 23%) applies, no matter how long you held.

Sources:
http://www.bolsamania.com/declaracion-impuestos-renta/como-tributan-los-bitcoins-en-la-renta/
https://noticias.infocif.es/noticia/tributacion-de-los-bitcoins

I think Shawshank is right but not in the last point, as pharesim has said. It used to be like that but government changed it in 2015. So, it doesn’t matter how long you hold them.

Something that hasn’t been said is that as far as taxes are concerned, a miner is considered a businessman, so tax to pay is different: it is the IAE.
This article has a great general overview on crypto taxes in Spain (in Spanish):

http://www.bolsamania.com/noticias/declaracion-renta/los-impuestos-del-bitcoin-y-el-ether-asi-tributan-operadores-mineros-y-comercios-que-trabajan-con-criptodivisas--2724307.html

[FriendlyAlliance]

If you change from Bitcoin to another virtual currency
...
In this case taxes would have to be paid for the profits of the operation, as there is a change in equity. Again, the difference between the value of buy and sell will be taken into account.

If this is true, being tax compliant in Spain becomes a hell for an active trader.

Strangely it contradicts somewhat with:

Bitcoins operate through virtual wallets, which is where these virtual coins are stored. From a point of view of the taxation of the virtual currencies, these have no real value until you convert them to a national currency, that is, to euros in the Spanish case.

No real value before conversion to Euros, but liable to taxation in change of equity between cryptos.
I know some other European countries agreeing with the "no real money before converted" thinking, but sane enough not to say you need to announce profits trading between BTC/altcoin pairs. Can someone confirm this schizophrenic ruling? How in the world can they enforce it?

_{Quotes Chrome translated from this source:
http://www.bolsamania.com/declaracion-impuestos-renta/como-tributan-los-bitcoins-en-la-renta/}

Adding to my earlier questions the link for the site provided by Don Pedro Dinero above:

(http://www.bolsamania.com/noticias/declaracion-renta/los-impuestos-del-bitcoin-y-el-ether-asi-tributan-operadores-mineros-y-comercios-que-trabajan-con-criptodivisas--2724307.html)

The calculation of this equity gain is obtained from the difference between the acquisition value and the transfer value. The second "is very easy to calculate because it is what you get for the value of the bitcoins," clarifies De la Cruz. But the complication arises in the value of acquisition, since you may have bought criptomoneda at many different prices, so you must choose an accounting criterion to decide how much we paid in your day for each of the currencies we sell. The expert on legislation on blockchain recommends the FIFO system ("First in, First out"), that is to say, the first ones that enter are the first ones that come out, because "since the ultimate goal is speculation, just as in actions, it is better to apply the FIFO", he justifies. "Nor would it be a bad approximation to apply a weighted average price criterion. That is, take stock of the bitcoins that have been taken during the year and calculate the average purchase price, "adds De la Cruz.
There is a derivation of this subject that is the conversion of bitcoins to another criptomoneda of the universe of more than 300 'altcoins' that exist at present . "From my point of view, if you switch from bitcoins to ether, for example, I'm already making a pecuniary alteration," says Grant Thornton's lawyer. But the majority of those who liquidate the bitcoins only do so when they switch to euros, since it is when Hacienda has the reference that there has been an income in the bank account, an option that the specialist questions, since the criptomonedas do not enjoy of the profits of the investment funds , in which one can move from one to the other and the latent capital gains are maintained.

I'm still confused about value gained between alt transactions...

All my BTC purchases happened years ago with insignificant amounts and thus I'm not even interested in reporting deductions of sales.
If I became a tax resident in Spain, could I just simply report taxes simply by declaring capital gains tax on the BTC converted to Euros?

Can a Spanish resident trader simply sell BTC to EUR into bank account and just report that as capital gains and be done with it?

For me I couldn't justify residing in a jurisdiction which required me to report every single trade I've made between cryptocurrencies...

Anyone got a clue / where to get completely reliable information about this?

[Don Pedro Dinero]

If you change from Bitcoin to another virtual currency
...
In this case taxes would have to be paid for the profits of the operation, as there is a change in equity. Again, the difference between the value of buy and sell will be taken into account.

If this is true, being tax compliant in Spain becomes a hell for an active trader.

Strangely it contradicts somewhat with:

Bitcoins operate through virtual wallets, which is where these virtual coins are stored. From a point of view of the taxation of the virtual currencies, these have no real value until you convert them to a national currency, that is, to euros in the Spanish case.

No real value before conversion to Euros, but liable to taxation in change of equity between cryptos.
I know some other European countries agreeing with the "no real money before converted" thinking, but sane enough not to say you need to announce profits trading between BTC/altcoin pairs. Can someone confirm this schizophrenic ruling? How in the world can they enforce it?

_{Quotes Chrome translated from this source:
http://www.bolsamania.com/declaracion-impuestos-renta/como-tributan-los-bitcoins-en-la-renta/}

Adding to my earlier questions the link for the site provided by Don Pedro Dinero above:

(http://www.bolsamania.com/noticias/declaracion-renta/los-impuestos-del-bitcoin-y-el-ether-asi-tributan-operadores-mineros-y-comercios-que-trabajan-con-criptodivisas--2724307.html)

The calculation of this equity gain is obtained from the difference between the acquisition value and the transfer value. The second "is very easy to calculate because it is what you get for the value of the bitcoins," clarifies De la Cruz. But the complication arises in the value of acquisition, since you may have bought criptomoneda at many different prices, so you must choose an accounting criterion to decide how much we paid in your day for each of the currencies we sell. The expert on legislation on blockchain recommends the FIFO system ("First in, First out"), that is to say, the first ones that enter are the first ones that come out, because "since the ultimate goal is speculation, just as in actions, it is better to apply the FIFO", he justifies. "Nor would it be a bad approximation to apply a weighted average price criterion. That is, take stock of the bitcoins that have been taken during the year and calculate the average purchase price, "adds De la Cruz.
There is a derivation of this subject that is the conversion of bitcoins to another criptomoneda of the universe of more than 300 'altcoins' that exist at present . "From my point of view, if you switch from bitcoins to ether, for example, I'm already making a pecuniary alteration," says Grant Thornton's lawyer. But the majority of those who liquidate the bitcoins only do so when they switch to euros, since it is when Hacienda has the reference that there has been an income in the bank account, an option that the specialist questions, since the criptomonedas do not enjoy of the profits of the investment funds , in which one can move from one to the other and the latent capital gains are maintained.

I'm still confused about value gained between alt transactions...

All my BTC purchases happened years ago with insignificant amounts and thus I'm not even interested in reporting deductions of sales.
If I became a tax resident in Spain, could I just simply report taxes simply by declaring capital gains tax on the BTC converted to Euros?

Can a Spanish resident trader simply sell BTC to EUR into bank account and just report that as capital gains and be done with it?

For me I couldn't justify residing in a jurisdiction which required me to report every single trade I've made between cryptocurrencies...

Anyone got a clue / where to get completely reliable information about this?

First, these are the Spanish lawyers who know the most about cryptos taxes. I may go to ask them in the future.

https://www.abanlex.com/areas-de-practica/derecho-de-internet/bitcoin-y-otras-criptomonedas/

As for what you are asking for Hacienda (the Spanish law department): investing in cryptos is like investing in forex, you only pay taxes on them when you convert them into Euros, because you may lose everything. There are some exceptions to this like the Impuesto del Patrimonio, but as far as what you are asking I think it will be enough to declare them when you convert them into euros.

That quote you put is the opinion of a lawyer, he says that you should pay taxes when you exchange cryptos for btc or the other way around, but Hacienda hasn’t means to check that nowadays.

This taxation is like when you buy and sell stocks or funds. You may have bought them at different times and prices, so if you sell part of your investment, the FIFO system applies.

If you are taking about a significant amount of money, it is worth spending a little bit asking abanlex lawyers.  For small amounts, if you pay taxes, Hacienda is not likely to mess with you.

[FriendlyAlliance]

First, these are the Spanish lawyers who know the most about cryptos taxes. I may go to ask them in the future.

https://www.abanlex.com/areas-de-practica/derecho-de-internet/bitcoin-y-otras-criptomonedas/

As for what you are asking for Hacienda (the Spanish law department): investing in cryptos is like investing in forex, you only pay taxes on them when you convert them into Euros, because you may lose everything. There are some exceptions to this like the Impuesto del Patrimonio, but as far as what you are asking I think it will be enough to declare them when you convert them into euros.

That quote you put is the opinion of a lawyer, he says that you should pay taxes when you exchange cryptos for btc or the other way around, but Hacienda hasn’t means to check that nowadays.

This taxation is like when you buy and sell stocks or funds. You may have bought them at different times and prices, so if you sell part of your investment, the FIFO system applies.

If you are taking about a significant amount of money, it is worth spending a little bit asking abanlex lawyers.  For small amounts, if you pay taxes, Hacienda is not likely to mess with you.

This is the kind of clarification I was looking for!
I got a feeling the lawyer was talking about just his own opinion, but wasn't sure.

Having to do individual profit/loss calculation on each trade would be a monumental task to do and if it ever got to the point where a tax office would ask me the details, I'd perhaps print out several hundreds of pages of exchange transactions and let them figure it out themselves 

To me it sounds most plausible that they won't bother if your income is not astronomical.

Thanks a lot for referring that firm, I've been looking for ones if I ever need some consultation in the future! 

[gentlemand]

I thought the EU was supposed to be all united and stuff. It's bizarre how different tax treatments are especially when people can just move.

If I had enough BTC I'd definitely relocate for as long as it took to pay the tax if I needed to cash out. If I'd held for less than a year I'd head to the Netherlands. The capital gains there is less than 2%.

[FriendlyAlliance]

I thought the EU was supposed to be all united and stuff. It's bizarre how different tax treatments are especially when people can just move.

If I had enough BTC I'd definitely relocate for as long as it took to pay the tax if I needed to cash out. If I'd held for less than a year I'd head to the Netherlands. The capital gains there is less than 2%.

EU is not supposed to be all united, well, apart from pro EU Federal State neoliberal corporatist's / bureaucrats kind of people's dreams.

European nations have their own long term traditions of law, economic policies, culture and so on and to compare the states of the US are, even if thought of as local law sandboxes, still very much bound by the Federal jurisdiction.

EU citizens in most EU countries are generally quite in much of opposition to generalizing everything for everyone as it tends to benefit only few economies while others suffer as the last recession clearly showed. Re-nationalization is a strong movement in last few years to counter idealism which has not translated into practice - Namely as cultures and economies within the regions are vastly different and have minds of their own.


Majority of the people can't "just move" apart from their holidays.
Most people are still tied to local employment and thus very immobile.
Other limiting factors are language and cultural barriers that prevent ordinary people to make a leap.

Even if you could remove 10-20 % of taxation in some cases, you'd had to uproot your entire life, learn new language, etc.
Conformism, nationalism, comfort zones... Many reasons pile up to make it a very different zone that say, the US is, where you could hop State very easily as an average citizen.


Netherlands would make sense for some as you are right for capital gains being very low, but for instance, I'd rather pay 20% to Spain than 2% to Netherlands for the sole reason of weather, language, culture, choice of different cities, local climates, people's outlook on life etc.

The problem with most tax residency laws is that you actually have to spend more than 6 months in a year to keep on enjoying (or not) those levels of taxation... Chancing tax residencies is not a quick process of packing your bags and going to another country as the laws are bit more persistent than just booking a flight and going - Freedom of travel is an amazing thing, but tax laws are very different thing.
I hope this made sense to you and you'll have a better idea why things are the way they are

[gentlemand]

As any worker and any business can relocate anywhere in the EU I'm surprised the tax treatments are still so different. We can see all the friction it's caused with Amazon domiciling in Luxembourg and denying tax to the other multiple EU countries it operates in.

I don't really see how that's sustainable as the corporate giants get bigger and more ravenous.

I myself would have no compunction about moving to another country for a while to save a few million in tax. I've lived in a few different countries and it was no big deal. Walk down the average street in any large EU city and it'll quickly become clear that millions of people are doing just the same thing.

[Serpens66]

Just a short addition to netherlands:
As far as I know you often do not pay captial gains on bitcoin profits. In most countries, netherlands included, you pay income tax on profits. So it is expensive in netherlands.
Source:
https://bitcointalk.org/index.php?topic=1935246.msg19220592#msg19220592

[gentlemand]

Just a short addition to netherlands:
As far as I know you often do not pay captial gains on bitcoin profits. In most countries, netherlands included, you pay income tax on profits. So it is expensive in netherlands.
Source:
https://bitcointalk.org/index.php?topic=1935246.msg19220592#msg19220592

Only if you're an active trader rather than a long term holder. I've no idea how you prove that or what the criteria are, but I'd guess most people are just sitting on coins rather than trading them like mad. It would be interesting to hear from people in this situation how it was decided what was a living and what was a hobby.

[leonair]

Just a short addition to netherlands:
As far as I know you often do not pay captial gains on bitcoin profits. In most countries, netherlands included, you pay income tax on profits. So it is expensive in netherlands.
Source:
https://bitcointalk.org/index.php?topic=1935246.msg19220592#msg19220592

Only if you're an active trader rather than a long term holder. I've no idea how you prove that or what the criteria are, but I'd guess most people are just sitting on coins rather than trading them like mad. It would be interesting to hear from people in this situation how it was decided what was a living and what was a hobby.

Yes as long as you don't convert your crypto to fiat taxes will not be placed on it. Just keep the coin and when it reaches $20,000 a piece convert it to fiat. You won't notice the tax on it anymore since your returns is 8x of original price. But on other thought how are they going to determine how much you gained from the coin?

[gentlemand]

Yes as long as you don't convert your crypto to fiat taxes will not be placed on it. Just keep the coin and when it reaches $20,000 a piece convert it to fiat. You won't notice the tax on it anymore since your returns is 8x of original price. But on other thought how are they going to determine how much you gained from the coin?

I've seen a few people who've cashed out and coughed up say they priced everything they paid at 1c each for the sake of an easy life.

As long as you keep records of all your bank transfers and wallet movements it must be possible to build a precise picture of all your gains. Should the time ever come I don't think I'll bother with that as it'll be a pretty negligible difference in the tax paid with a whole lot of extra work on top.