The proliferation of new technologies has led to the birth, boom and development of a myriad of new actions with various possibilities in the current scenario. As we know, one of these new proliferations is cryptocurrencies, that is, a digital asset that uses cryptographic encryption to guarantee its ownership and ensure the integrity of transactions. These cryptocurrencies can be acquired by users who have the economic capacity required for the acquisition of the currency, whose acquisition value fluctuates in economic terms as it varies according to supply and demand. Continuing with the procedure, once the acquisition of the coin in question is completed, it will become part of our digital wallet, also known as Wallet, understood as an application that facilitates the storage, sending and receipt of cryptocurrencies through keys held by the owner of the cryptocurrencies.
However, the holding of cryptocurrencies inexorably leads to the emergence of legal consequences since it constitutes a manifestation of the user's economic capacity, thus giving rise to the birth of tax obligations with the Tax Agency that may result in requirements and/or tax proceedings of various kinds. In this line, it is important to highlight that there is currently no express regulation on virtual currencies, generating some confusion on the matter. Accordingly, in the last few years the figure of the cryptocurrency lawyerThe cryptocurrency lawyer, in charge of providing the necessary legal security to the transactional operations carried out through the application of tax knowledge on the matter, thus advising both companies and individuals and investors on all legal implications and operations related to cryptocurrencies, has arisen in recent years.
Among the main tax obligations, we can highlight those derived from Law 11/2021, of July 9, on measures for the prevention and fight against tax fraud; Law 10/2010, of April 28, on the prevention of money laundering and terrorist financing and the Proposal for a Regulation of the European Parliament and of the Council on crypto-asset markets and amending Directive (EU) 2019/1937. Therefore, in view of the obligations imposed in the legal texts regarding the provision of information on the holding and operations in the market with cryptocurrencies, new fiscal and tax obligations arise that require the intervention of an expert figure in the legal field in confluence with new technologies.
However, a lawyer specialized in cryptocurrencies is not limited exclusively to corporate or individual advice, but his actions extend to the management and filing of all those tax forms that are closely related to cryptocurrencies, that is, the filing of the Income Tax Return, Form 720 or inheritance and gift tax, wealth tax, non-resident tax, etc.
For such purposes, in order to perform the tasks described above, a cryptocurrency lawyer has the obligation to study the market operations, the stock market value, the rise, arrangement and analysis of the movements that have been generated in the market as well as the study -with regard to the viability and legal implications- of all those operations that users have carried out.
However, it is important to determine that the obligations of a cryptocurrency lawyer are not limited to ensuring regulatory compliance and/or analysis of transactions, but extend to other broader areas of complexity.
Among the operations - the characteristics of which vary depending on the service provided to companies and/or individuals - we find:
- Advice on the taxation of cryptocurrencies.
- Fulfillment of obligations with the Tax Agency.
- Legal implications in the purchase and sale of cryptocurrencies.
- Advice on the operation and management of virtual purses or wallets.
- Drafting, control, analysis and monitoring of contracts related to cryptocurrencies.
- Requirements and/or penalties with the Tax Agency.
- Legal defense in proceedings related to cryptocurrency matters.
- Wills or inheritances directly or indirectly related to cryptocurrencies.
- Prevention of money laundering, theft and fraud.
Going into the main tax obligations faced by cryptocurrency lawyers, we find the mandatory filing of the Income Tax Return by which the Treasury will require, as from January, the declaration of all those cryptocurrencies held as well as their value in euros. This obligation will be extended to individuals and entities that are in possession of assets on the dates indicated for their taxation. Following this line, those persons or entities in possession of cryptocurrencies deposited abroad are obliged to report on virtual currencies by filing form 721 regarding the "informative declaration on virtual currencies located abroad1", which arose as a consequence of the obligation imposed by Law 11/2021, of July 9, on measures for the prevention and fight against tax fraud by establishing an informative obligation regarding the holding of virtual currencies located abroad in order to improve the tax control of the taxable events that may arise from such holding.
In addition to the Income Tax Return and Form 721, there are foreign investment declaration forms2 , including the declaration of holders of Spanish investments abroad in Negotiable Securities (Form D-6) to which it is planned to incorporate the obligation to declare cryptocurrencies together with the form.
Now, once the tax implications and the main obligations and/or actions of a cryptocurrency lawyer have been explained, we ask ourselves the following question: what is the legal consequence in case of not declaring cryptocurrencies? The answer, as we have advanced at the beginning of the article and as can be deduced, is simply the imposition of a financial penalty whose price ranges between €5,000 fine for concealment of assets, data or set of undeclared data and €10,000 for the omission of each transaction carried out, whether partial, false or simply inaccurate.
From the reading of the article can be deduced, on the one hand, the tax implications arising from the matter and, on the other hand, the importance of the figure of a cryptocurrency lawyer specialized for this purpose and responsible for the management of matters related to these. Therefore, at Vicox we offer a Cryptocurrency Tax Advisor dedicated entirely to the management and declaration of your assets.
1 The Draft Order approving Form 721 "Informative declaration on virtual currencies located abroad", and establishing the conditions and procedure for its presentation can be consulted. Available HERE
2 The foreign investment declaration forms are available for consultation. Available HERE
