Spanish taxpayers who have received bitcoin (BTC) or other cryptocurrencies through gifts or airdrops in the past year are now required to declare these to the Treasury. This includes tokens from Worldcoin, the project initiated by Sam Altman, known for co-creating ChatGPT. This directive is particularly pertinent as Spain is currently in the midst of its annual Income Tax declaration period, which runs from April 3 to July 1.
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During this declaration period, both individuals and companies must report not only the profits made from cryptocurrencies but also their holdings and the corresponding value in euros. The Spanish Tax Agency has clarified the taxation process for cryptocurrencies acquired not through purchase but via non-sale methods such as gifts, airdrops, or referral programs. These should be reported as “profits and losses without transmission,” distinguishing them from regular trading activities.
This classification means that such cryptocurrencies are recognized as direct income rather than capital gains. The taxable amount is determined based on the value of the cryptocurrency at the time of acquisition, not at the time of sale. According to tax advisors, this means that gifted cryptocurrencies are not taxed as savings. Instead, they are added to other forms of income such as salaries within the income tax return, hence taxed at a different rate compared to sales transactions.
WorldCoin Holders In Spain Face Regulatory Scrutiny
The impact of these regulations is significant, especially considering the popularity of cryptocurrency gifts last year. Worldcoin, for example, distributed its WLD tokens to approximately 360,000 Spaniards in 2023 in exchange for biometric data. These tokens, which could be exchanged for fiat currency or other cryptocurrencies, are used across various platforms such as Discord, Shopify, and Telegram, among others.
Despite a precautionary measure that has currently halted Worldcoin’s data collection activities in Spain, the recipients of these tokens are still obligated to declare them to the Tax Agency. The value of these tokens varies, but on average, it could represent between 10 and 40 euros per individual.
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Tax experts stress the importance of declaring every cent linked to cryptocurrencies, which the Treasury considers financial assets. For capital gains not derived from a sale, the taxation falls into the general income section, with rates ranging from 19% to 47% depending on the autonomous community of the taxpayer.
This new mandate underscores the growing scrutiny of cryptocurrencies by tax authorities and highlights the importance of compliance in this evolving financial landscape. Taxpayers dealing with cryptocurrencies should ensure they are fully aware of their obligations to avoid potential penalties and ensure compliance with Spain’s tax regulations.
