The keys to understanding crypto asset taxation in Spain

From a tax point of view, issuers and investors in cryptoassets in Spain should bear in mind that:

(a) At the regulatory level, tax reporting obligations have only been incorporated in Spain for cryptocurrency holders and intermediaries (forms 172, 173 and 721) in certain cases. These obligations have come ahead of those being negotiated in the EU (DAC 8 Directive) and in the OECD (Agreement known as Crypto Asset Reporting Framework CARF), and will foreseeably be extended to other cryptoassets.

b) At the interpretative level, we have a body of binding doctrine from the Directorate General of Taxes (DGT) very focused on cryptocurrencies that provides some legal certainty in certain taxes (IRPF, IS, ISD, IP), but which is clearly insufficient and should be extended to other cryptoassets such as securities and utiliy tokens. In this sense, for the rest of cryptoassets, as of today we only have statements for VAT purposes for NFTs and in the field of Wealth Tax (IP) for securitization and utility tokens.

Therefore, for tax purposes we must start from the existing regulations in each tax and interpret them adapting them to the new reality of cryptoassets. Given the heterogeneity of these cryptoassets, their different functionalities, the different underlying products or services, the different types of rights attributed to their holder and the obligations assumed by their issuer, the analysis of the tax implications must be carried out on a case-by-case basis, taking into account the particular circumstances of each specific case. Basically, and in line with what has been stated by the DGT, the analysis must take into account the powers or rights granted by the crypto-asset to its holder vis-à-vis its issuer (regardless of its denomination).

Regarding the issuance and investment in utility tokens and security tokens, it should be noted that there are very significant differences in the tax field that every issuer must take into account. In essence, and in general:

(a) Issuances of security tokens (STO) do not generate any accounting income for the issuer, nor, consequently, tax income, not generating corporate taxation. Furthermore, from the point of view of indirect taxation, the delivery of security tokens in a primary market is not subject to VAT (transaction either not subject to VAT or subject to and exempt from VAT).

b) On the other hand, the issuance of utility tokens through ICOS, IEO or IDOs, insofar as they involve the delivery of an underlying good or the provision of an underlying service, will generate before or after an accounting income that is taxed as corporate tax (the key is to see if this taxation can be deferred, from the delivery of the token to when it is exchanged at a later time).

The same applies to VAT, since if the provision of the underlying service or the delivery of a good is subject to and not exempt from VAT, the delivery of such a utility token may also be subject to VAT. Again, the question to be analyzed is whether the issuer must charge VAT on the initial delivery of the token during the ICO, or can it be deferred to a later time when the token is exchanged for a good or service (there are technical arguments to defend the latter option).