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Practical Income Manual 2021.

New information obligations related to holding and operating with virtual currencies

Regulations. Thirteenth Additional Provision. 6 and 7 Personal Income Tax Law

To use virtual currencies we need them to be stored and guarded and to be able to prove who their owners are. For this there are, on the one hand, the so-called "electronic wallets" that provide custody services for virtual currencies and, on the other, the so-called "exchange" (coin exchange platforms) that allow purchase and sale operations to be carried out with them. .

In order to strengthen tax control over taxable events related to virtual currencies, since July 11, 2021, Law 11/2021, of July 9, on measures to prevent and combat tax fraud, transpose Directive (EU) 2016/1164, of the Council, of July 12, 2016, establishing rules against tax avoidance practices that directly affect the functioning of the internal market, modifying various tax and related regulations gaming regulation, has modified the Thirteenth Additional Provision of the Personal Income Tax Law to establish two new information obligations related to holding and operating with coins virtual.

  1. Information obligations on holding virtual currencies

    For persons and entities that provide services to safeguard private cryptographic keys on behalf of third parties, to maintain, store and transfer virtual currencies, whether said service is provided primarily or in connection with another activity, the obligation to provide the Administration is introduced. tax information on all the virtual currencies they keep in custody. This supply will include information on balances in each different virtual currency and, where applicable, in legal tender, as well as the identification of the owners, authorized or beneficiaries of said balances.

    For these purposes, it should be noted that section 7 of article 1 of Law 10/2010, of April 28, on the prevention of money laundering and the financing of terrorism, calls these people or entities “providers of wallet custody services.” by stating that “ Custody service providers for electronic wallets will be understood as those natural persons or entities that provide safeguarding or custody services for private cryptographic keys on behalf of its clients for the holding, storage and transfer of virtual currencies.”

  2. Information obligations on operations with virtual currencies

    Likewise, for persons or entities that provide exchange services between virtual currencies and legal tender money or between different virtual currencies, or mediate in any way in carrying out such operations, or provide services to safeguard private cryptographic keys on behalf of third parties. , to maintain, store and transfer virtual currencies, the obligation to provide information about virtual currency operations (acquisition, transmission, exchange, transfer, collections and payments) in which they intervene is established. This same obligation extends to those who make initial offers of new virtual currencies.

These new reporting obligations on virtual currencies are pending regulatory development .

Attention: Likewise, the eighteenth Additional Provision of Law 58/2003, of December 17, General Tax, has been modified to establish an obligation to provide information on virtual currencies located abroad, which is also pending regulatory development.