What happens if I don't pay taxes on cryptocurrencies in Spain?

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Within the framework of the Income Campaign, Spain began this week the process for the declaration of Personal Tax (IRPF), which will end on July 1. This is a mandatory activity that since 2021 began to include holders of bitcoin (BTC) and cryptocurrencies. To comply with the requirements of the Income Tax return, taxpayers must follow a series of steps before the Spanish Tax Agency. They begin with the informative declaration, which had to be made between January 1 and March 31 through forms 172, 173 and 721. The first two models are used to report on operations and balances in cryptocurrencies, while The 721 is the form intended to report on cryptocurrencies abroad. As experts and advisors on the subject explain, throughout this process it is important to know that the Tax Agency is attentive to irregular actions, omissions, legal non-compliance and suspicious behavior that it detects in taxpayers. This, in order to determine whether or not violations have been committed. In this way, sanctions can be applied both for not making the declaration and for making it incomplete or incorrectly, intentionally or not. The goal, in the case of bitcoin holders who reside in the Iberian country, is for them to declare any change in assets due to buying and selling, exchanging, mining, staking, farming, airdrops, ICOs, lending or liquidity pools. Cryptocurrency holdings outside the country must also be reported if they exceed 50,000 euros. The mere possession of cryptocurrencies within Spain is taxed through the Wealth Tax (form 714). For not properly reporting or omitting information about all these activities, the authorities have established sanctions that can range between 300 and 20,000 euros. The weight of the sanctions will depend on the amount defrauded or the type of information that is hidden, especially if the Tax Agency determines that there is intentionality. In the worst case, the applicable percentage may exceed 100% of the amount defrauded.

What types of actions can lead to sanctions?

First of all, if the information return was not filed you have to pay 300 euros As minimum. Presenting it with irregularities may also mean paying a penalty, although with a lower amount. When it comes to paying taxes, three types of fines are established for not making the declaration of cryptocurrencies, applying 50%, 100% or 150% of the defrauded amount. The sanction will depend on the seriousness of the infraction. The Spanish Treasury makes a difference of 3,000 euros between minor and serious penalties, so the minimum fines for not filing an income tax return They can reach 1,500 euros. On the other hand, if the omissions or non-compliance have to do with model 721, A fixed fine of 5,000 euros has been established for each data or set of data referring to each type of cryptoasset that has not been included in the model; or whose information has been incomplete, incorrect or false. The minimum amount of fine in these cases is estimated at around 10,000 euros. As reported by BitcoinDynamic, if the model is submitted after the deadline, the fines total 100 euros for each data or set of data. The minimum for this offense has been stipulated at 1,500 euros. Obligated subjects must provide the names, surnames, company name and tax identification numbers of the country of residence of the people or entities that provide cryptocurrency services. It is worth noting that when the Treasury detects actions that can be classified as an infraction, You must follow a series of steps before applying a sanction. The process includes carrying out an investigation, initiating a procedure and going through an allegations phase. In the end, the resolution that establishes applying the sanction must be duly motivated and justified. Regarding this, the CEO of Quipu, a company specialized in taxes, remembers that There are sanctions that do not involve the payment of fines but other impediments. The most common are the impossibility of accessing public subsidies or aid for a period of time; the prohibition of contracting with the Public Administration and the suspension of the exercise of an official profession, employment or public office.