The State Tax Administration Agency (AEAT) started the 2021 Personal Income Tax declaration campaign (IRPF 2021) on April 6. All self-employed workers are required to submit the 2021 income tax return, with the sole exception of those with economic returns of less than 1,000 euros per year. As for the rest of taxpayers, the deadline for filing the self-employed income tax return is June 30, either in person, online or by phone.
The self-employed and small businesses are in the crosshairs of the State Tax Administration Agency in the face of this income tax return campaign. This was made clear in the Tax Control Plan for 2022, published by the AEAT last January. The public body has increased surveillance of commercial operations, such as collections and payments, made with cryptocurrencies or other new payment methods, as is the case with Bizum, in order to prevent tax evasion and fraud. In fact, the Tax Agency has included box 1626, whose title is ‘Balances in virtual currencies’, in the income statement forms for self-employed workers to declare the amount of digital currencies they have.
Declaration of income obtained through cryptocurrencies
The Tax Agency defines cryptocurrencies (also called virtual currencies) as follows: “immaterial goods, computable by units or fractions of units, which are not legal tender, but are used as a means of payment as they can be exchanged for other goods, including other virtual currencies, rights or services if they are accepted by the person or entity that transfers the good or right or provides the service”. The popularity of cryptocurrencies has grown exponentially in recent years. More and more freelancers invest in cryptocurrencies or accept them as a means of payment in their businesses.
In this guide prepared by Declarando on the taxation of cryptocurrencies in Spain, we have all the information on how cryptocurrencies are taxed in our country. In this article we will answer the main questions about the declaration of cryptocurrencies in income.
Is it mandatory to declare cryptocurrencies in income 2021?
All the self-employed who have the obligation to present the 2021 income tax return must declare the cryptocurrencies, regardless of the volume of profit or loss. Once included in the income, independent professionals will always be required to declare this type of earnings. In the case of those self-employed with economic returns of less than €1,000 per year, they have to declare the digital currencies when they have earned €1,500 or more. As for losses, it is not mandatory to declare them, as long as they do not exceed €500. All commercial operations carried out with cryptocurrencies by the self-employed, both in Spain and abroad, are considered as capital gains or losses or income from movable capital, so that they are taxable.
The self-employed must include the movements made with cryptocurrencies (swap, sale, mining, airdrops, forks and lending) in box 1626. In the event that they have obtained interest or returns derived from cryptocurrencies, both for exchanges between cryptocurrencies during the year as for the conversions of cryptocurrencies to euros, they have to declare them as a capital gain or loss.
What are the Treasury fines for not declaring cryptocurrencies?
The Tax Agency establishes penalties of €5,000 for the self-employed who do not declare the cryptocurrencies or make mistakes when doing so, because it is considered an infraction according to the taxation of virtual currencies in Spain.
Declaration of collections and payments through Bizum for freelancers
Bizum is a fast payment service, implemented by numerous banking entities in Spain, that allows you to send and receive money instantly. This system has become the payment method most used by many freelancers to collect their products or services. Despite its popularity, many doubts arise about the statement of collections and payments through Bizum for freelancers.
Who is obliged to declare income and payments from Bizum?
All self-employed workers are obliged to declare the income and payments they receive through Bizum as income. Thus, any income obtained in this way that implies an economic benefit must be declaredas occurs with other similar operations such as bank transfers, since it is an economic benefit derived from a professional activity.
Is there a limit that must be declared to the Treasury?
The Tax Agency establishes a maximum of 10,000 euros per year that can be sent through Bizum. This means that the self-employed who do not make movements greater than this amount do not have the obligation to include the collections and payments made through this system in the income statement.
What are the Treasury fines for not declaring income and payments from Bizum?
In the case of not declaring the income and payments made through Bizum, the self-employed can face fines between 20 and 30% of the surchargeplus default interest.
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