Blockpit has just launched in Spain Cryptotax, its tracking and tax filing tool for digital assets . The tax debt of digital assets is not calculated, reported and automatically deducted to the Treasury, so there is a risk of unconscious tax evasion .
Last year the digital assets market experienced a great boom, so those investors who obtained profits through such transactions must include them in this year’s income tax return (they still have time until June 30 to do so).
It should be remembered that the Law for the prevention and fight against tax fraud obliges those who hold third-party cryptocurrenciesto inform about the ownership of said possession and the transactions carried out with them, among other modifications in the tax field.
A booming market
The year 2020 saw the most significant annual growth in the cryptocurrency market and there are already more than 7.5 million Spaniards who have entered it, most of them (60%) as a financial investment.
Since the beginning of 2021 and with the strong increase in this sector, Blockpit obtained a growth of its user base in Spain of more than 1,300%.
Cryptotax
Cryptotax is a tax calculation softwarethat allows importing transaction data from the main cryptocurrency exchange houses (exchange) and personal purses (wallets) and analyzes them automatically, so that the user can obtain their tax report with all the necessary information for the Tax Agency with one click.
The app (free for up to 25 trades a year) evaluates data anonymously and in read-only mode (whether you’re trading, mining, staking, or holding a long-term investment, tax conditions will vary). The resulting tax report is optimized for taxes and the calculation algorithm is audited by one of the four big auditing firms (Big Four).
Beware of the Tax Agency
Both profits and losses resulting from operations with cryptocurrencies, whether they are obtained through the exchange for other assets or by providing a good or service in exchange for cryptocurrencies, must be included in the income tax return .
“Another dangerous category includes gifts and prizes such as Airdrops or Rewards. They are those capital gains for which no cost has been incurred. Gains or losses of this type must also be included in the general income tax base, along with the rest of the income that makes up the tax base,” warns Florian Wimmer, CEO and co-founder of Blockpit.
Currently, many crypto asset traders are unaware of their tax liability and that they are responsible for declaring and paying taxes associated with digital assets. In the worst case, they could be charged with tax evasion with heavy penalties .
“Any exchange made, whether from crypto to legal tender or from crypto to crypto, is a taxable event according to current Spanish legislation. The taxable gain or loss will be the difference between the acquisition cost of the asset and its market value at the time of sale,” says Wimmer. Therefore, many operations carried out previously may have led to decisions that were not optimized from the start. tax perspective, or even unwittingly caused tax evasion.