Spain to Tax Bitcoin Mining
September 28, 2016 Taxation in Spain
A recent notice issued by the National Directorate of Tax of Spain indicated that the minim Bitcoins and other cryptocurrencies will soon be a taxable activity.
Bitcoins and other cryptocurrencies are created through a process called mining where custom-built computers are used to solve complicated mathematical problems in order to obtain the cryptocurrencies.
Previously mining has not been a taxed activity, despite the fact that the result is the creation of a valuable asset.
The National Directorate of tax indicated that they have taken the view that mining is an economic activity.
It has not yet been indicated how mining will be taxed, but some experts think that the rate could be between 10 percent and 47 percent of the value of the mined coins.
While the tax may be a setback for some miners, industry specialists have suggested that the new tax could open a pathway for miners to begin claiming tax deductions for electricity and equipment used in the process.
Mining of cryptocurrencies requires significant amounts of electricity, and frequent updates to the equipment used.