Do I need to declare my Bit2Me sales transactions to the tax authorities?

Yes, cryptocurrency transactions you carry out are subject to declaration in Spain.

In Spain, cryptocurrency transactions are treated as capital gains or losses for Personal Income Tax (IRPF) purposes.

IRPF Declaration (Income Tax)

The following operations will generate a capital gain or loss that must be declared in your IRPF:

• Sale of cryptocurrencies.

• Exchange of cryptocurrencies for other digital currencies (swap).

• Exchange of cryptocurrencies for FIAT money (Euros or other traditional currency).

• Payment for goods or services using cryptocurrencies.

How to declare gains and losses:

• Capital gains and losses must be included in the specific section: “Capital gains and losses from the transmission and exchange of virtual currencies by individuals”.

• Losses incurred may be offset against gains from that year, or from subsequent years, if certain legal circumstances are met.

Other income you must declare:

• Income from Staking: This will generate income from movable capital and must be declared in the corresponding section.

• Income from Mining: This will generate either income from movable capital or income from economic activity, depending on whether it is generated within the framework of a business or professional activity.

Wealth Tax Declaration

If you are obliged to file a Wealth Tax declaration, cryptocurrencies must be declared at their market price as of December 31st of each year, as indicated by the Tax Agency in the binding consultation V2679-21.

• Box to fill in: Box 46, titled “Virtual currency balances”.

You will need to complete the following fields:

1. Percentage of ownership.

2. Denomination or type of virtual currency.

3. Number of units.

4. Value in euros.

Risks of not declaring

If you have obtained gains from cryptocurrencies and have not included them in your declaration, the Tax Agency could apply a penalty ranging from 50% to 150% of the IRPF tax liability that should have been paid on that gain.

Bit2Me support tools

To simplify your declaration, you can export all your transaction information from Bit2Me:

• Download your activity and Tax Report: You can find out how to obtain your transaction Excel and Bit2Me Tax Report by following these links: How to export all activity on Bit2Me? How to obtain tax information on Bit2Me? (for Spanish residents only)

• Declaration Guide: If you need detailed instructions on how to declare your cryptocurrencies, please refer to our article: TAX: Steps to file your IRPF declaration (Spain only)