Avoiding Penalties on Cryptocurrency Declarations: Hacienda's Guidelines to Follow
In the world of digital assets, understanding taxation is crucial for Spanish and German cryptocurrency investors. Here's a breakdown of the key points to help you navigate the tax landscape.
Spain
For individuals and legal entities residing in Spain, Model 721 is essential for declaring cryptocurrencies held on platforms or wallets located outside of Spain. This model is also required for permanent establishments of foreign persons or entities. Model 173, on the other hand, is used to detail all cryptocurrency transactions during the fiscal year.
The Spanish Tax Agency has included boxes 1800-1814 exclusively for declaring cryptocurrencies in the IRPF declaration for 2024. Each operation involving cryptocurrencies must be recorded carefully in the declaration, with the acquisition value and exact date of each operation specified.
The tax rates for crypto gains in Spain are progressive, starting at 19% for up to 6,000€, and reaching 28% for amounts exceeding 300,001€. If you have a balance of more than 50,000 euros in cryptocurrencies, you must declare this amount specifically to avoid future complications with the Tax Office.
Germany
In the 2025 German tax declaration, you must declare your cryptocurrencies in the income tax section for private sales transactions (private Veräußerungsgeschäfte) under the personal income tax. This includes reporting any profits or losses from buying and selling cryptocurrencies within one year, following the detailed requirements for documentation and valuation set in the BMF letter from March 2025.
Direct and indirect staking of cryptocurrencies is considered capital income by the Tax Office, and as such, must be declared. Cryptocurrency mining is also considered an economic activity.
Good planning can save investors thousands of euros in taxes, always within the legal framework. The Tax Office wants to provide clarity for cryptocurrency investors to optimize their tax strategy.
In both Spain and Germany, it's important to remember that any movement that involves a capital gain or loss with cryptocurrencies must be reflected in the declaration. Tax doubts should not prevent investors from fully enjoying their gains.
For a simple, clear, and secure way to manage your cryptocurrency investments, consider using the website that provides information, tools, and support to help you navigate this new financial reality. Cryptocurrencies have become a daily reality for many Spanish and German investors, and understanding the tax implications is a crucial part of maximising your returns.
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