Certainties and concerns about the tax implications of cryptocurrencies'.

Juan Ignacio Echarren, managing partner of Lener's tax department, and Luis Román, senior lawyer of the same department, analyze in La Ley the certainties and concerns about the tax implications of cryptocurrencies.

Although cryptocurrencies do not have the legal status of currency or money, they are admitted as a means of exchange of products or services, at the convenience of the parties. In transactions with cryptocurrencies, and for Personal Income Tax (IRPF) purposes of the recipient of the virtual currency, it must be analyzed whether it derives from an employment relationship or from the self-management of means of production and/or human resources with the purpose of intervening in the production or distribution of goods or services.

If the answer to this question is negative, the authors state, it will give rise to an alteration of assets for the parties that will give rise to a capital gain or loss, in accordance with the doctrine of the Directorate General of Taxes (DGT). Otherwise, it will constitute an income from work in kind (with the limits established for this type of remuneration) or an income from economic activity, respectively.

On the other hand, any individual who carries out a transaction with virtual currencies will have his or her assets affected, and will therefore have an impact on his or her Personal Income Tax (IRPF). In view of this circumstance, the authors point out that the "FIFO method" should be followed, i.e. the first virtual currencies that entered the assets will be the first to leave.

Another issue discussed in the article is the impact on VAT of supplies of goods and services exchanged in virtual currencies.

Read the full article here.