Decentralized Finance (DeFi) offers exciting opportunities for earning yield through staking, lending, and liquidity mining. However, Spain’s tax authority (Agencia Tributaria) treats DeFi earnings as taxable income. Failing to report can lead to penalties. This guide explains how to legally navigate taxes on DeFi yield in Spain.
## How DeFi Yield Is Taxed in Spain
Spanish tax law categorizes DeFi earnings as either:
– **Capital Gains**: Profits from selling/trading crypto assets after acquisition.
– **Savings Income**: Rewards from staking, lending, or liquidity pools.
Tax rates range from 19% to 28% based on earnings:
– First €6,000: 19%
– €6,000–€50,000: 21%
– €50,000–€200,000: 23%
– Over €200,000: 28%
## Tax Treatment of Common DeFi Activities
### Staking Rewards
– Taxed as savings income when tokens are received.
– Example: Earning 5 ETH from staking triggers tax on their market value at receipt.
### Liquidity Mining
– Rewards (e.g., LP tokens) are taxable income upon receipt.
– Impermanent loss/gains when withdrawing assets count as capital gains/losses.
### Lending Interest
– Yield from platforms like Aave is savings income, taxed annually.
### Airdrops and Forks
– Taxable as miscellaneous income at fair market value.
## Calculating Your DeFi Tax Liability
Follow these steps:
1. **Track All Transactions**: Log dates, amounts, and EUR values at transaction time.
2. **Determine Cost Basis**: Original purchase price + associated fees.
3. **Calculate Gains/Losses**:
– Selling price – Cost basis = Capital gain/loss
– Reward value at receipt = Savings income
4. **Apply Holding Period Discount**: Assets held >1 year qualify for reduced tax rates.
## Reporting DeFi Taxes in Spain
Include DeFi earnings in your annual tax return (Declaración de la Renta):
– **Form 172**: Report savings income (staking, lending yields).
– **Form 721**: For overseas crypto holdings exceeding €50,000.
– **Deadlines**: File between April–June 2025 for 2024 earnings.
Key documentation:
– Exchange records
– Wallet transaction histories
– EUR conversion proofs
## Avoiding Common Compliance Mistakes
– **Misclassifying Income**: Don’t treat staking rewards as non-taxable “interest.”
– **Ignoring Small Earnings**: All yield must be reported, regardless of amount.
– **Forgetting Losses**: Capital losses offset gains; report them to reduce liability.
## Frequently Asked Questions
### Is DeFi yield taxable in Spain?
Yes. The Agencia Tributaria explicitly states that crypto-based earnings—including staking, lending, and liquidity mining—are subject to income tax.
### How do I report DeFi earnings if I use international platforms?
You must still declare all earnings. Use third-party tax tools (e.g., Koinly or TokenTax) to consolidate data and convert to EUR for Form 172.
### Are there tax exemptions for DeFi in Spain?
No specific exemptions exist. However, capital losses can offset gains, and holdings over one year benefit from lower tax rates.
### What penalties apply for unreported DeFi income?
Fines range from 50%–150% of unpaid tax plus interest. Deliberate evasion may trigger criminal charges.
### Do I pay tax on unrealized DeFi gains?
Only when you sell, trade, or receive rewards. Holding crypto isn’t taxed.
### Can I deduct DeFi transaction fees?
Yes. Gas fees and platform costs reduce taxable gains when calculating net profit.
## Staying Compliant in 2024
Spain is increasing crypto tax audits. Use portfolio trackers, consult a crypto-savvy gestor, and file accurately. Proactive compliance avoids penalties and ensures you keep more of your DeFi earnings.
