Non-residents with crypto-assets and their connection to Spain

The taxation of a non-resident holding crypto-assets is fertile ground for knee-jerk assumptions, and they are worth resisting. The first question is not whether there is an exchange, a custodian or a wallet connected in some way to Spain, but whether the specific income under analysis can be legally characterised as obtained in Spanish territory, under the consolidated text of the Non-Resident Income Tax (IRNR) and, where applicable, the relevant double tax treaty. Transposing to this area location criteria designed for other taxes or regimes readily leads to error.

The assumptions worth avoiding

It cannot be asserted, as a general rule, that the mere sale of cryptocurrencies by a non-resident is taxed in Spain at 19%. Nor that crypto-assets are located in Spain simply because they are traded through a platform with a commercial presence or technical support here. And, in particular, the location criterion that the DGT has used in the special regime of Article 93 LIRPF (the impatriate regime) cannot be carried over without more to the IRNR or to non-residents’ Wealth Tax (IP).

Location of the asset and source of the income: two distinct questions

For crypto-assets, the notion of location is conceptually unstable: the asset has no physical situs, and its territorial connection depends largely on the specific legal relationship with a third-party custodian, a service provider or a corporate structure. But even if a given location of the asset is provisionally accepted, that does not resolve the distinct question of whether the income obtained by the non-resident is Spanish-source income. The characterisation of the income, the role of the intermediary, the possible existence of a permanent establishment and the applicable treaty remain decisive.

The useful administrative doctrine on location comes from two places. On one hand, from a ruling issued directly within the IRNR —V1069-19, on a non-resident selling bitcoin—, which is authority of its own for this tax. On the other, from the impatriate-regime rulings applying that same location criterion —V1662-23 and V0376-24. That material helps distinguish self-custody from third-party custody; however, carrying the reasoning specific to Article 93 LIRPF over to the IRNR calls for caution, and the characterisation of each item of income must be analysed separately.

Capital gains of the non-resident: a prudent position

For a non-resident without a permanent establishment, the disposal of ordinary virtual currencies does not fit naturally within the classic categories of Spanish-source income —real-estate income, dividends, interest or royalties. For that reason, unless a further, legally relevant circumstance is present, the IRNR taxation of any gain obtained on selling or swapping crypto-assets from abroad should not be presented as settled. The argumentative burden for sustaining taxation in Spain has to be considerably stronger than the mere existence of a custodian or an operational point of contact with Spanish territory.

The permanent establishment: the point that can change everything

The above conclusion may vary substantially if the non-resident carries on in Spain an economic activity connected to those crypto-assets through human or material resources that allow a permanent establishment to be found. In that case, the analysis is no longer that of a mere passive holding or disposal and comes to depend on the income attributable to that establishment. It is therefore appropriate to distinguish clearly between passive investment, the provision of services, organised trading and crypto business activity: they do not receive the same treatment.

Non-residents’ wealth tax: reinforced caution

In Wealth Tax (IP), the risk of overstatement is similar. That the law taxes non-residents on assets and rights located in Spanish territory does not mean that every cryptocurrency held in custody or traded through an operator with some connection to Spain must be deemed located here. The available doctrine offers useful criteria for specific cases, but does not yet allow a universal and safe rule to be built for any custody structure. The prudent course is to keep the question open, except where the legal configuration of the custodian and the safeguarding service supports a well-founded conclusion.