Worldcoin's questionable practices and their potential implications in Renta's official declaration
WorldCoin and Tax Obligations: A Guide for Cryptocurrency Users
WorldCoin, the biometric cryptocurrency, has been making headlines lately. But with its unique nature comes a set of tax obligations that users should be aware of.
Firstly, WorldCoin tokens received through a biometric scan action must be declared in the 2024 tax return. These tokens are considered taxable income or assets, depending on national tax laws for cryptocurrencies. It's important to note that WorldCoin tokens received in exchange for an eye scan are not considered capital gains derived from a transmission by the IRS.
The Tax Office considers these tokens as income and equates them to prizes, lotteries, or 'airdrops', which must be taxed in the general base. This means that they are not exempt from tax as a simple innocent gift.
Investing in crypto assets is not fully regulated and may not be suitable for retail investors due to its high volatility. There is a risk of losing the entire amount invested.
If you sell WorldCoin tokens at a lower value than the original, the loss can only be offset within the taxable base of savings, not with previously paid taxes in the general base. On the other hand, if you simply bought cryptocurrencies to keep them in your digital wallet (hodling), you are not obligated to declare them.
The Tax Agency uses the FIFO (First In, First Out) method to declare cryptocurrency operations. This means that when you sell or exchange your cryptocurrencies, the first ones you bought will be the ones you sell first, for tax purposes.
Individuals who have made sales or exchange transactions of cryptocurrencies during 2024 must declare those transactions. To do so, include all operations in the specific section called 'Gains and losses from the transmission of other assets' within the Income Tax return, in the savings base.
The Tax Agency is showing increasing interest and closer scrutiny of cryptocurrencies each year. In fact, the 2024 Income Tax Campaign will focus on cryptocurrencies. It's crucial to keep a clear and organized record of all your cryptocurrency operations, from purchase to exchange or sale, including exact dates and precise values.
The deletion of WorldCoin's iris codes in Spain set an important precedent regarding privacy and cryptocurrencies. The Spanish Data Protection Agency ordered the mandatory deletion of all iris codes collected by WorldCoin in December 2024.
As regulations around cryptocurrencies continue to evolve, it's expected that they will become clearer, more detailed, and probably stricter in the near future. Spain is likely to gradually adopt regulations that become more homogeneous with those of the rest of Europe and the world.
For a reliable and secure platform for managing digital assets, visit our website. Keeping meticulous records of all your transactions, dates, and values will simplify your cryptocurrency declaration and ensure compliance with tax laws.
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