Everything you need to know about bitcoin taxation

[jrineakter]

When cryptocurrencies were born, they seemed to us to be an absolutely incomprehensible toy. A puzzle. In part, they still are, since they were born not so long ago, so that first impression is still the only one for the majority of the population.

However, the Bitcoin trend has managed to partially democratize their use, not only for telecommunications experts. Today, Bitcoins are in the public domain, a trend, and as such, they raise a series of questions that urgently need to be answered. The first and most important: if I acquire a Bitcoin, do I have to pay taxes on it?

Below we will present the 7 most frequent fiscal and tax doubts in relation to cryptocurrencies. We will do so with the help of the guide prepared by Easyoffer , the online lawyers platform, and which has been echoed by the Emprendedores website . Let's see:

I am a bitcoin miner, do I have to pay taxes?
The short answer is yes. The long answer is: “Bitcoin mining is considered an activity, with expenses and income, and therefore you have to register and pay the Tax on Economic Activities. In the meantime, the Tax Agency is studying this new figure to regulate it,” states the Easyoffer guide.

READ MORE: What is a blockchain and what is it used for?

Treasury vs. Cryptocurrencies
“It is possible to operate with cryptocurrencies and at the same time have the peace of mind that our relationship with the Tax Agency will not bring us any unpleasant surprises. However, there is a lot of ambiguity in the legislation regarding how virtual currencies are taxed. At a European level, it is not known how to control hong kong number data it, since it escapes the laws issued by governments. These currencies are regulated by people, and they escape the control of banks,” says the guide prepared by the online lawyers platform.

So, tribute for my cryptocurrencies?
“The time has come to settle accounts with the Treasury. What happens with Bitcoin is that, as a result of its sharp rise in value, those who had these cryptocurrencies some time ago have found themselves with a fortune. It may also be that, attracted by the potential of this market, they have entered into the buying and selling, with purchase as a safe haven, or with the intention of using it to acquire goods or services,” the guide adds.

“The Tax Agency knows our assets and, although it may not be aware of the amount we have in cryptocurrencies, any substantial increase in assets may raise suspicions,” he warns.

I have bitcoins, but I haven't put them into circulation
“If no transaction has been carried out with cryptocurrencies, there is no liability to the tax authorities either. Thanks to the anonymity provided by blockchain technology, not even the tax authorities will, for the time being, be aware that an individual has these coins in their possession.

But as soon as a purchase is made with bitcoins from a certain entity or coins are sold and the money is transferred to a bank account, that asset will be at the disposal of the Tax Agency. The tax prescription is set at four years by Article 66 of the General Tax Law," the guide explains.

I have sold bitcoins, how do I report it?
“If bitcoins are sold for a higher price than they were purchased for, the gain must be reported in the assets. The way to do this is in the income tax return. For last year's campaign, the tax rates were 19% for a capital gain of up to 6,000 euros, 21% up to 50,000 euros, and 23% for amounts above that,” the manual states.

I buy in bitcoins, what should the buyer and seller do?
“Bitcoin (XBT) can be used to buy goods and services, and is authorised as a means of payment in Spain. In January 2018, the press reported the first home paid for with bitcoins in Spain. In this transaction, a penthouse in the centre of Tarragona was sold for 40 bitcoins. This fact has caused uncertainty among notaries. For any purchase made in bitcoins, VAT must be paid as if it were made in euros. There is only one exempt case, when you give euros and receive bitcoins.”

“The ball is now in the seller's court, as they will have to complete the paperwork to translate the sale into cryptocurrencies, into a Euro entry to settle the quarterly payments with the Treasury to settle the Value Added Tax (VAT). The Treasury does not accept tax payments in cryptocurrencies,” the guide assumes.