The European Union considers bitcoin a means of payment (this was determined by the Supreme Court of the European Union in 2015). This interpretation changed the impact of VAT on transactions with this currency. However, taxes for virtual currencies in income work differently.
For the purposes of IRPF, speculating with bitcoins is no different than investing in Forex or binary options, to give two examples. In fact, the fiscal precepts that will be applied in the 2017 rent are exactly the same.
If you buy or sell Diponion and you get a benefit, it will be considered a profit or loss in the income. In this sense, it will be added to the rest of the capital gains and losses, such as those derived from trading on the stock market or buying an investment fund.
The gain or loss is calculated by subtracting the purchase value from the sale value. That is, if you sell Diponion or another cryptocurrency, for more value than you buy, you earn money and you have a profit. If you sell Diponion for a value lower than the purchase of virtual currency, you lose money.
As an example, if you buy a Diponion worth 1,000 euros and sell them for 5,000 euros, you will have earned 4,000 euros that you must add to the rest of the capital gains such as shares or investment funds and you will pay taxes.
Compensate losses for cryptocurrencies
What if instead of winning you have lost with the cryptocurrency? In case of suffering losses, the taxation of the cryptocurrency in income allows you to compensate them with other capital gains that you have had during that year.
To understand it better, imagine that you lose 1,000 euros when investing in cryptocurrencies but you have won 5,000 euros in stock market. The Tax Agency will allow you to subtract those 1,000 euros from losses to the 5,000 euros, so you will only pay taxes for 4,000 euros when making the rent.
If there were no profits with which to compensate that year you can do it with the ones you generate the following four years. In this sense, the taxation of virtual currencies is the same as that of shares.
I sell but I do not take the money from the virtual wallet, do I have to pay taxes?
The cryptocurrencies operate through virtual wallets, which is where these virtual currencies are stored. From a point of view of the taxation of virtual currencies, they have no real value until you convert them to a national currency, that is, to euros in the Spanish case.
For practical purposes this means that as long as you keep your cryptocurrencies in the purse you will not have to pay taxes.
Cryptocurrencies and VAT
VAT on cryptocurrencies is the tax that changes with the decision of the community court. If so far only the withdrawal of bitcoin in ATMs was exempt from payment, now all operations with bitcoins will have no VAT. The judgment equates the virtual currency to other means of payment and therefore establishes that VAT should not be included.
What changes is the concept of cryptocurrencies, which ceases to be an element of a barter to be a means of virtual payment, so that the purses are considered as a bank account in a different currency.
The cryptocurrencies in the Tax on Patrimony
What happens with the cryptocurrencies in the Tax on Patrimonial Transmissions? The European ruling opens the door to its exemption from the ITP because if it is electronic money, it would not be within the ITP and would be exempt. In fact, this tax is in a sense the analogue to VAT but applied to the sale of second-hand goods (more directed to individuals who sell their things) and therefore it is logical to think that if you do not pay VAT, you will not pay the ITP.
It will be necessary to wait to know the exact interpretation that the community and national courts do.
Bitcoin miner's taxes
A case very different from the previous ones is that of the bitcoins miner. The mining of the virtual currency is one of the three ways to obtain bitcoins in addition to the trading, that we have already seen, and the sale of articles that are paid with this cryptocurrency.
Bitcoin mining is not exempt from paying income taxes. What happens is that it will do so in a very different way from the purchase-sale of virtual currencies.
On the other hand, the Treasury has already clarified the most controversial point through a binding consultation with the Ministry of Finance. The miners must give themselves wing in the Tax of Economic Activities (IAE) in the epigraph 831.9 of the section 1 - here you can see how to do it-. As an employer, you must also pay taxes on the income statement.
In addition, you must also become self-employed in Social Security and pay the corresponding fee, although at this point you could skip this step if you do not earn more than the Interprofessional Minimum Wage with your activity. This is at 9,900 euros in 2017.
What the miner should not pass on is any type of VAT, since the activity is subject to but exempt. Similarly, you can not deduct the VAT you support for your activity.
The miner in the income statement
Mining must be included in the IRPF, specifically in the economic activities section.
In particular, it is necessary to include the benefits that have been obtained. These only take place when liquidating the virtual currency, that is to say, when converting it to traditional currency. Doing so will subtract the expenses incurred (energy, purchase of equipment and other supplies) to the benefit. In this article we explain how to make the rent as autonomous.
The resulting amount will be added to the general tax base to be taxed at the general types of IRPF.
Taxes, if as a company you are paid in Cryptocurrencies.
Another formula to get Diponion is to sell something and charge in this virtual currency. The question is: What taxes do you have to pay in that case?
It should be remembered that cryptocurrencies are considered a payment method and have a currency range for these purposes. Most companies that accept cryptocurrencies convert them directly into euros without further formalities. This would do, as explained in this article, that its accounting effect was neutral.
When it is charged directly in cryptocurrencies the question changes, since the Institute of Accounting and Audit of Accounts explains in non-binding consultation that it should be considered an asset of the company.
On the other hand, in Portugal, capital gains from the sale of cryptocurrencies are not subject to taxes, according to the Ministry of Finance.
Investor interest in digital currencies is growing. And whoever wants to invest in these currencies has an incentive in Portugal. It is that the profits from your sale are not subject to taxes in Portugal. The information is from the Ministry of Finance: "The sale of cryptocurrencies is not subject to IRS taxes against the Portuguese tax system, especially in the category E - Capital - or G - capital gains," he told DN / Mad Money a official ministry source. Only capital gains will be taxed "when, due to its regularity, it constitutes a professional or business activity of the taxpayer, in which case it will be subject to taxation in category B", he added.
But the situation is not clear and the investor reveals some concerns. "How do you know if it is an investment or a professional activity?". Therefore, you have some precautions in your transactions. "When I sell, I prefer to do the business directly with the buyer (peer-to-peer) and receive the payment in cash," he said.
In view of the doubts, some digital currency enthusiasts in Portugal are considering having a base in Malta, a country where the effective tax rate for non-residents is only 5%.
Clearer for Finance is the taxation of value added tax (VAT) on goods and services purchased with cryptocurrencies. "According to information from the Tax Authority, the products bought with bitcoins pay VAT," said the official source of Finance.
On the other hand, before the recent interest of the government of Argentina to extend the collection of taxes to cryptocurrencies, the bitcoiner community represented by the NGO Bitcoin Argentina criticized the proposal of regulation and taxes for cryptocurrencies of the State, explaining reasons and recommendations for the treatment of cryptocurrencies with respect to taxes with these.
The pronouncement of the NGO was made known through the official website of the organization and through various local media. In its statement, Bitcoin Argentina expressed its position on the proposed law on taxes for the financial income of people and their profits, which includes cryptocurrencies or "digital currencies". In the proposal of the State, the use as a form of payment and the exchange of cryptocurrencies by natural persons would be subject to taxes.
For this moment, the current law does not include cryptocurrencies in any type of tax, and although the NGO Bitcoin Argentina considers that if there should be certain regulations and measures regarding the use of currencies, or the technology that underlies them, he qualified the project as "a short-term collection proposal". Apparently, this project - which covers digital services in all its forms - especially attacks the profits obtained with digital currencies, with taxes of up to 15%.
According to the Bitcoin Argentina statement, the bill says: "The profits obtained from the alienation of" digital currencies "are taxed at the rate of 15%, whether it is Argentine source (slate tax) or foreign (Second Category) ". On this project in general and its implication to users of cryptocurrencies, the NGO adds:
In general, the proposed regime implies the assimilation of the "digital currencies" to the same treatment in the income tax that receives the results by sale of public titles, bonds and other securities, which represent an obligation with the holder, something that in digital currencies does not happen.
In principle, the NGO begins its criticism from the assertion that the project does not know the purpose or purpose of cryptocurrencies, in relation to the ideals that were originally raised by Satoshi Nakamoto in the Bitcoin White Paper. In addition to that he would be giving a detrimental treatment in relation to foreign currencies. Also, among their reasons, they report that the demand thus raised would affect the development of enterprises that is emerging and growing more and more in the Latin American country.
Here highlights that Argentina, especially Buenos Aires, is a region where bitcoin and cryptocurrencies have a good level of adoption, so the project according to the NGO, by restricting the entrepreneurship in this sector, would be reducing the generation of jobs, specific losses and costs of innovation opportunities, and the exclusion of sectors that are outside the banking system.
Likewise, the bill also contradicts previous communications from the Argentine government in favor of adopting bitcoin and blockchain technology. In summary, Bitcoin Argentina concludes that the project will bring "legal questions, interpretive conflicts, informality and net loss of collection, loss of investments, jobs, solidarity and irrecoverable opportunity costs."
In the end, does not bring a genuine collection, since the project implemented many users would have the dilemma of trading bitcoins in exchange offices asking for their data or do it directly in what we could say "black markets" to avoid tax declaration . And it is that the monitoring and supervision of bitcoin and other cryptocurrencies is limited.
Finally, as part of the pronouncement, Bitcoin Argentina released some recommendations and proposals in opposition to the government bill, which is summarized in that cryptocurrencies should be treated similarly to foreign currencies or private money that coexists with national currencies . Finally, they point out that other cryptoactives or tokens can have purposes other than a simple form of payment, and that these, being similar to shares or securities, could "have the same fiscal treatment, at the moment of defining themselves politically, the so-called" financial income '".
Virtual currencies are means of payment and investment assets.
Dollars, euros, pounds ... In the world there are infinity of currencies, even virtual ones. Cryptocurrencies emerged as an alternative payment method to traditional currencies. Over time they have become an investment object and a safe technological alternative to data storage thanks to the blockchain. Of course, as in any field, if you invest in cryptocurrency, you will have to pay taxes
On the other hand, the Arizona Senate in the United States approved a bill on February 8 of this year, to allow state residents to pay their taxes with cryptocurrencies, according to public records.
Senate bill 1.091, which seeks to enable the use of cryptocurrencies for the payment of taxes, was presented on January 10, 2018, and approved on January 24 by the Senate Finance Committee for a total of votes of 4-3. On February 8, the Senate approved the bill by 16 votes in favor, 13 against, and one null vote.
The bill has now been sent to the Arizona House of Representatives. If approved, Arizona would become the first State in the United States to accept cryptocurrency tax payments by 2020, as indicated in the public record. The bill would allow state taxpayers to use "a payment method, such as Bitcoin, Litecoin or any other cryptocurrency recognized by the department, using peer-to-peer electronic systems".
According to the bill, the Arizona Department of Revenue, upon receiving payments in cryptocurrencies for "taxes and any interest and penalties," would be obligated to convert the payments to US dollars within the next 24 hours.
The Republican representative of the State of Arizona, Jeff Weninger, who co-sponsored the bill, said the fiscal measure is intended to turn the State into a center of "Blockchain and digital currency technology in the future." Referring to the tax bill, Weninger told him this week:
It is a litany of invoices that we are running that is sending a signal to everyone in the United States, and possibly all over the world, that Arizona will be the place for Blockchain technology and digital currency in the future.
The value of Bitcoin has oscillated wildly in recent months. For example, on November 6, the value was USD $ 5,878. On December 11, it was more than USD $ 19,000. And at the beginning of February of this year it was USD $ 8,553.
Sen. Steve Farley, D-Tucson shared his concerns before the Senate approved the bill on Thursday. Farley said:
"What this does in effect is to transfer the volatility risk of the person who pays their taxes and to the Department of Revenue and therefore to all other taxpayers. We take US dollars in the Revenue Department to pay taxes. I think US dollars should be good enough. "
The implementation date is not until 2020, which would give the Revenue Department time to determine which currencies it will accept and how it will make the change to US dollars.
Petersen said that because the Revenue Department will only credit taxpayers with the value of Bitcoin after converting it to dollars, there is no risk to the State.
"Even if for some reason the state does not receive what was sent, the State will only give it credit for what was received," Petersen said.
Petersen said that Farley was only telling one side of the story.
"What the good senator did not mention, it is true that he has fallen ... he forgot to mention that he has increased 4,000 percent," said Petersen.
At a January 24 Finance Committee hearing, Petersen said the bill was necessary to give taxpayers options. Petersen said:
Everything is about ease and convenience. Here in government we are to serve people.