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Cryptocurrencies are a symbol of the modern digital economy, and because of this, they are gaining increasing attention from entrepreneurs.
They offer new horizons for businesses, providing innovative perspectives on finance, payments, and investments.
However, owning cryptocurrency in Spain involves specific rules and has certain limitations.
We will examine how limited liability companies (Sociedad Limitada, SL) can efficiently engage with cryptocurrency in Spain and protect themselves from cryptocurrency risks.
Is it possible to create a crypto-based company?
Although the idea of establishing a company entirely based on cryptocurrencies is appealing, this is not yet possible in Spain.
Regulations require the minimum share capital of an SL to be €1, deposited in a bank account in fiat currency.
Despite their growing popularity, cryptocurrency in Spain is not considered legal tender and cannot replace mandatory monetary contributions.
However, this does not mean their use is ruled out.
Cryptocurrency can be integrated into a company’s asset structure after its registration, opening up numerous possibilities for business development.
This includes crypto payment acceptance and cryptocurrency payment processing within your company.
How to use cryptocurrency in Spain for daily operations
Once the company is established, cryptocurrencies can become an essential part of its operations, provided the entrepreneur adheres to regulations.
The main uses include:
Receiving payments
A growing number of customers currently prefer to pay in cryptocurrency.
Companies can accept such payments by recording their value in Euros based on the exchange rate at the time of the transaction.
However, assessing crypto tax in Spain, such as VAT, is calculated in the official fiat currency.
Investments
For companies, cryptocurrencies are not only a means of payment but also a valuable asset.
They can be acquired to sell them later and capitalize on value increases.
In accounting for cryptocurrencies, these assets are recorded as intangibles and adjusted according to price fluctuations.
Payments to suppliers
Knowing how to pay in crypto to suppliers, there are different possibilities.
These transactions must also be reflected in Euros at the market value at the time of the operation.
Mining
Companies engaged in cryptocurrency mining can operate officially as businesses.
However, they must register and comply with the corresponding tax obligations.
Financial responsibility: how to avoid mistakes?
The use of cryptocurrency in Spain in business requires a rigorous approach to accounting for cryptocurrencies and tax compliance.
It is essential to:
- Keep a detailed record of all operations, reflecting all your crypto’s value in Euros.
- Submit periodic tax declarations, including reports on gains derived from cryptocurrency transactions.
- Stay updated with legislative changes in Spain and the EU to ensure compliance with new regulations.
The Spanish Tax Agency (Agencia Tributaria) introduced Form 721, a declaration for virtual assets held abroad, announced in the Boletín Oficial del Estado on July 29, 2023.
If a company’s assets exceed €50,000 on foreign platforms, they must be declared using model 720 or 721, as applicable.
However, it is important to consult a reliable Spanish accountant (gestor), like Delaguía y Luzón, for further assistance and clarification as certain residents can benefit from the Beckham Law Tax Regime.
Advantages and risks: what to consider?
Cryptocurrencies offer unique advantages for businesses, such as expanding their customer base, new investment opportunities, and integration into advanced technologies.
However, they also present significant risks:
- Volatility: Price fluctuations can lead to unexpected gains or significant losses.
- Regulatory changes: Digital asset regulations are constantly evolving, requiring continuous monitoring to avoid non-compliance.
Cryptocurrency asset management in Spain
Cryptocurrencies represent a bridge between the traditional economy and the digital future.
Limited liability companies in Spain, offer broad prospects, from new payment methods to investments in advanced technological assets.
However, their use requires responsibility, attention to detail, and strict adherence to existing regulations.
With the right approach, utilizing cryptocurrency in Spain can become more than just a tool for businesses—it can be a key competitive advantage.
Let your company be an example of innovation in the digital age.
Contact our international tax specialists at Delaguía y Luzón for more details on your digital finance journey.
