Cryptocurrencies and the self-employed: taxation when you get paid in crypto
More and more freelancers and professionals are receiving part or all of their remuneration in cryptocurrencies. The Spanish tax framework has clear rules regarding this that are worth knowing well.
Getting paid in crypto for professional services
When a self-employed person provides services and gets paid in Bitcoin, ETH, or another crypto:
The income will be valued in euros at the exchange rate at the time of payment (or agreement, depending on the accrual).
Tax classification: Income from economic activity, just as if you were paid in euros.
The invoice: in crypto or in euros?
The invoice must be issued in euros (or with the euro equivalent indicated). You cannot issue an invoice "in BTC" without converting to the euro.
Example:
- You provide a service for 0.05 BTC.
- On the day of the invoice, BTC is trading at €90,000.
- The invoice must reflect: €4,500 + VAT (if applicable).
VAT and cryptocurrencies
Cryptocurrency purchase and sale operations are exempt from VAT (Article 20.Uno.18 LIVA, following the CJEU doctrine in the Hedqvist case).
However, if you provide services and get paid in crypto, VAT remains mandatory on the value of the service in euros:
- Web design for €4,500 → VAT: €945 → Total invoice: €5,445.
- The client pays you 0.0605 BTC (equivalent to €5,445).
- You pay the €945 VAT to the AEAT.
Cryptos received as a business asset
Once received, cryptos are just another asset of your activity. When you sell them (or use them to pay for expenses), it generates:
Income from economic activity (if you use them directly in the activity) or capital gain/loss (if you hold them as an investment).
For the self-employed, the simplest management is to convert to euros immediately upon collection, avoiding the complexity of managing crypto within the economic activity.
Expenses in crypto
If you pay for business expenses in crypto (subscriptions, freelance services from another provider...), the expense is valued in euros at the exchange rate at the time of payment. The input VAT is deductible under the same requirements as any other expense.
Registration with the Tax Agency and forms
If you receive payment in crypto regularly and this constitutes an economic activity:
- You must be registered in the IAE (Economic Activities Tax) under the corresponding heading.
- You must submit Modelo 303 (quarterly VAT) and Modelo 130 (quarterly IRPF installments).
- In Modelo 130, the income is computed in euros at the exchange rate at the time of collection.
Conclusion
Getting paid in crypto does not exempt you from any tax obligations. The income is the same in terms of IRPF and VAT; simply the means of payment is different. The key is to correctly value each payment in euros at the time of receipt and maintain an impeccable record.