Exit tax and crypto-assets: what Article 95 bis LIRPF does and does not tax

A claim circulates about the exit tax that is as widespread as it is inaccurate: that leaving Spain with a wallet of appreciated cryptocurrencies triggers, by that fact alone, a charge on the unrealised gains. It is worth dismantling it precisely, because the provision as currently drafted says something different.

The actual scope of Article 95 bis LIRPF

Article 95 bis of the Personal Income Tax Act (LIRPF) does not, as things stand, set up a general exit tax on direct holdings of BTC, ETH or other crypto-assets held personally. Its objective scope refers to shares and interests in entities, with the thresholds and requirements specific to the provision. It should be made clear that this conclusion holds for cryptocurrencies in the proper sense —bitcoin, ether and the like—, which confer no participation rights in any entity. The position would differ for a security or equity token representing shares or interests in an entity: by its very nature, it could fall within the objective scope of Article 95 bis and would call for a specific analysis. It cannot therefore be asserted that an individual who moves out of Spain with a personal cryptocurrency wallet becomes subject, by that fact alone, to a Spanish exit tax on the unrealised gains of those tokens.

When there can genuinely be an exit tax

There can be an exit tax where the taxpayer loses their tax residence in Spain and holds shares or interests covered by Article 95 bis, exceeding the legal thresholds (the provision sets a combined market value of the shares or interests above €4,000,000, or, failing that, a holding of more than 25% whose market value exceeds €1,000,000) and meeting the prior-presence requirement: having held the status of IRPF taxpayer for at least ten of the fifteen tax periods preceding the last one that must be declared for this tax. In that case, the income is calculated as the difference between the market value on the date of the change of residence and the acquisition value. What is not appropriate is to transpose that mechanism to direct holdings of crypto-assets, which fall outside the provision.

A further point: the special rules for moves to the European Union or the European Economic Area —which allow payment to be deferred— operate only if the asset is genuinely within the scope of Article 95 bis. They are not an automatic rule for personal cryptocurrency wallets.

The real focus of risk: whether the change of residence is genuine

That Article 95 bis does not reach direct cryptocurrencies does not mean the move is tax-neutral. A change of tax residence is a question of fact, not a mere registration formality. The tax authority (AEAT) examines whether the move is genuine or whether the taxpayer keeps ties with Spain that may make Spanish residence prevail: a spouse not legally separated and minor children remaining here (the rebuttable presumption —iuris tantum— in the closing paragraph of Article 9.1 LIRPF, which operates in respect of both preceding criteria), the centre-of-vital-interests clause in the double tax treaties, or holding a net worth located mainly in Spain. To this is added, where the taxpayer is a Spanish national and the destination is a non-cooperative jurisdiction, the rule in Article 8.2 LIRPF, which preserves the status of IRPF taxpayer in the year of the move and the four following years.

That is where the real risk lies for the crypto-asset holder planning their departure. A merely formal move —to Portugal, say— while the family and centre of life remain in Madrid is an area of very high exposure to a tax reassessment: not because of the exit tax, but because the authorities may argue that Spanish tax residence was never lost and that, consequently, worldwide income remained taxable in Spain. The choice of destination country is still relevant, but for its effects on residence and future taxation, not because Article 95 bis taxes the unrealised gains of directly held crypto-assets. It should be made clear that the absence of an exit tax does not exempt gains that are actually realised while Spanish tax residence is retained: selling or swapping crypto-assets before or during the move realises a capital gain that is taxable as in any other year of residence.