Friday, July 1

Hacienda will short only Spanish cryptocurrency platforms

The anti-fraud law shorts the capital gains derived from transactions with crypto assets. But only from Spanish platforms or those with permanent establishments in the homeland. The measure has all the logic, but it assumes that clients will have the capacity to do regulatory arbitration with firms without offices in the country, according to tax sources. The Chinese Binance, the Hong Kong company Crypto.com and the American Coinbase will not have to send a single paper to the Tax Agency. Instead, Bit2Me and 2gether users will be controlled to the millimeter.

The appreciation of bitcoin is dizzying. From the $ 800 to which the unit was paid at the end of 2016, it has risen to the current more than $ 47,000, and even reached a record close to $ 68,000 in November (see graph). Capital gains in five years would now stand at around 5,800%. And these must be taxed as capital gains for the investor, who must integrate them into savings income.

Spaniards must declare any capital gains – when they sell the cryptocurrency in question – in the Personal Income Tax (IRPF), and they will pay between 19% for them, for benefits of up to 6,000 euros, and 26%, for those over 200,000 euros. In the case of capital gains of 6,001 to 50,000 euros, the rate will be 21%, and from 50,001 to 199,999 euros, 23%.

The fact is that, up to now and unlike what happens with banks and financial intermediaries, such as brokers, it was the citizens’ authority to comply with the treasury. While the Spanish banks send the tax administration all the information on stock market operations likely to have generated capital gains, until now there was no obligation on the part of cryptocurrency intermediaries. The situation was absolutely anomalous.

The standard specifies that the platforms will send the data of the balances in virtual currencies, as well as any operation related to them: acquisition, transmission, exchange, transfer, collections and payments. This same obligation extends to those who make initial offerings of new virtual currencies. Clients will also benefit from the ability to offset losses. If the capital gains exceed the capital gains, the former may be offset in the income statement for the next four years.

The regulation in force specifies that entities resident in Spain and permanent establishments in the country of foreign entities must inform the Tax Agency. That is, platforms that have establishments or offices of some kind. But this does not occur in most of the providers of these services, exclusively virtual, such as those mentioned Binance, Crypto.com and Coinbase.

Same obligation

The fact that foreign platforms do not inform the Tax Agency does not, of course, exempt their clients from declaring with absolute accuracy their eventual capital gains or losses in personal income tax. Although, in some cases it is also difficult for investors to have clear information about these data, due to the lack of a transparent protocol.

In the anti-fraud law it remains black on white: “The obligation to report on virtual currencies located abroad is introduced.” Already in the income statements made in 2019, the Tax Agency sent some 15,000 notices about transactions with cryptocurrencies. It notified citizens after learning about its operations thanks to the National Fraud Investigation Office (ONIF) and the control campaign it launched in 2018, when it requested information from 60 firms that participate in the sale of digital currency. He demanded data from banks, financial intermediaries, exchange houses and companies that accept this type of payments. The Tax Agency complemented this information with that sent by authorities from other countries.

In fact, the anti-fraud law already contains fines in the event that citizens do not correctly report if they have the coins in foreign firms. The sanction will consist of a fixed fine of 5,000 euros for each data of each virtual currency that should have been included in the declaration or that had been provided incompletely, inaccurately or falsely, with a minimum of 10,000 euros.

The Treasury prioritizes declaring in any case. The punishment is much less if it is reported, even after the deadline. If so, but it is not the Tax Agency that requires the information, the penalty will be 100 euros for each piece of information or set of them with a minimum of 1,500 euros.

Pending regulatory development

  • Waiting for more rules. It is true that the obligation to inform the Tax Agency must be detailed by regulation. And this development has not yet occurred. The key date will start on April 6, when the 2021 rental campaign begins, which will last until June 30.
  • Roadmap. The logical thing is that, before the personal income tax campaign begins, detailed instructions are available and, of course, that they have entered into force. Only in this way will Spanish firms or firms with a permanent establishment in the country that operate crypto assets will have the capacity to send the required information in a timely manner to the treasury.
  • Danger. Tax sources consider that the terms are very tight and open the door to the affected firms not having to report either the balances or capital gains of the past year during this year. Although there are still three months ahead and it is possible that the mandatory regulatory development on this issue will take place.

Reference-cincodias.elpais.com

Leave a Reply

Your email address will not be published.