How to Report NFT Profit in Spain: Complete Tax Guide 2024

Understanding NFT Taxation in Spain

Non-Fungible Tokens (NFTs) are considered digital assets under Spanish tax law, meaning profits from their sale are subject to capital gains tax. The Agencia Tributaria (Spain’s Tax Agency) treats NFT transactions similarly to other investment assets. Whether you’re an artist, collector, or trader, you must declare profits exceeding €1,000 annually. Failure to report can result in penalties of 50-150% of unpaid tax plus interest.

How NFT Profits Are Taxed in Spain

NFT profits fall under two tax categories:

1. Capital Gains Tax: Applies to profits from occasional sales. Taxed at progressive rates (19%-26%) based on profit amount.
2. Income Tax: For professional traders/artists with frequent transactions. Profits added to annual income and taxed at 19%-47%.

Deductible costs include minting fees, gas fees, platform commissions, and acquisition costs. Losses can offset gains within the same tax year.

Step-by-Step Guide to Reporting NFT Earnings

1. Calculate Net Profit: Selling price minus purchase price and all associated costs (e.g., €2,000 sale – €500 minting fees – €300 acquisition cost = €1,200 profit).
2. Determine Tax Category: Classify as capital gain (occasional sale) or income (professional activity).
3. Complete Modelo 100 Form: Report gains in Section G (Capital Gains) for investors or Section E (Economic Activities) for professionals.
4. Include Foreign Platform Earnings: Use Form 720 if NFTs are held on non-Spanish exchanges before June 30th.
5. Pay Taxes: Submit declaration electronically via Agencia Tributaria’s website by June 30th following the tax year.

Key Deadlines and Documentation

• Annual Declaration: File between April 1 – June 30 for previous calendar year profits
• Required Records: Transaction histories, wallet addresses, purchase/sale agreements, and cost receipts
• Special Cases: Artists earning royalties must declare as intellectual property income quarterly via Modelo 130

Common Reporting Mistakes to Avoid

• Not declaring small profits (€1,000+ threshold applies)
• Forgetting to deduct gas fees and platform commissions
• Mixing personal and professional NFT activities
• Overlooking Form 720 for foreign-held NFTs
• Using incorrect acquisition dates for cost basis calculation

NFT Tax FAQ for Spanish Residents

Do I pay tax if I sell NFTs at a loss?

Losses can be deducted from other capital gains. Unused losses can be carried forward four years.

How are NFT airdrops taxed?

Airdropped NFTs are taxed as miscellaneous income at 19%-26% based on market value at receipt.

Are NFT trades between cryptocurrencies taxable?

Yes. Each trade is a taxable event. Calculate gain/loss in EUR equivalent at transaction time.

What if I bought NFTs before moving to Spain?

Only gains accrued during Spanish residency are taxable. Maintain proof of acquisition date and value.

Can I reduce NFT taxes legally?

Strategies include holding assets >1 year for reduced rates, offsetting gains with losses, and deducting all allowable expenses.

Conclusion: Stay Compliant

Accurate NFT tax reporting in Spain requires meticulous record-keeping and understanding of digital asset classifications. With the Agencia Tributaria increasing crypto audits, consult a gestor specializing in cryptocurrency for complex cases. Proper compliance avoids penalties while ensuring you benefit from Spain’s evolving digital economy framework.