How to Report DeFi Yield in Spain: Your Complete 2024 Tax Guide

Understanding DeFi Yield Taxation in Spain

Decentralized Finance (DeFi) yield—earned through liquidity mining, staking, or lending—is taxable income in Spain. The Spanish Tax Agency (Agencia Tributaria) treats these earnings as “Rendimientos del Capital Mobiliario” (income from movable capital), subject to Personal Income Tax (IRPF). Failure to report can trigger audits, penalties of 50-150% of unpaid tax, and interest charges. With crypto’s traceability increasing, accurate reporting is essential for compliance.

Step-by-Step Guide to Reporting DeFi Yield

1. Calculate Your Annual Yield: Sum all DeFi earnings (in EUR) from platforms like Aave, Compound, or Uniswap. Convert crypto yields to euros using exchange rates at receipt time.
2. Determine Taxable Amount: For staking/lending, 100% of yield is taxable. Liquidity mining rewards are taxed as income minus gas fees.
3. Apply Deductions: Deduct platform fees and transaction costs directly linked to generating yield. Keep receipts.
4. Include in Tax Return: Report net yield in Box 0026 (“Rendimientos de capital mobiliario”) of Form 100 (IRPF declaration).
5. Pay Applicable Taxes: Tax rates range 19%-28% based on total annual income:
   • Up to €12,450: 19%
   • €12,451–€20,200: 24%
   • €20,201–€35,200: 27%
   • Above €35,200: 28%

Essential Documents for Reporting

• Transaction histories from DeFi platforms
• Exchange records showing EUR conversion rates
• Receipts for deductible expenses (gas fees, service charges)
• Wallet addresses used for yield activities
• Form 100 draft from Agencia Tributaria’s online portal

Critical Deadlines and Penalties

DeFi yield must be declared annually between April 1-June 30. Late submissions incur:

• 5% penalty + monthly interest for filings < 3 months late
• 10% + interest for 3-6 months
• 15% + interest for 6-12 months
• 20% + interest after 12 months

Tax payments are due June 30. Use direct debit via Form 100 for seamless processing.

Top 5 Reporting Mistakes to Avoid

1. Ignoring Small Yields: All earnings, even under €1,000, must be declared.
2. Using Incorrect Exchange Rates: Always use EUR values at transaction time (sources: ECB or CoinMarketCap).
3. Mixing Personal and DeFi Wallets: Maintain separate wallets for clearer auditing.
4. Overlooking Airdrops/Hard Forks: These are taxable events if linked to your DeFi activity.
5. Failing to Report Foreign Platforms: Spanish residents must declare global DeFi income, including on non-Spanish platforms.

Frequently Asked Questions (FAQ)

Is DeFi yield always taxable in Spain?

Yes. The Agencia Tributaria considers any crypto-generated yield as taxable income, regardless of the platform’s location or payout method (crypto/fiat).

How do I report yield from foreign DeFi platforms?

Follow the same process as Spanish platforms. Use Form 100 and include all worldwide earnings. Retain platform KYC data for potential audits.

Are losses from impermanent loss deductible?

No. Impermanent loss isn’t recognized as a deductible expense under current Spanish tax law. Only direct costs (gas fees) are deductible.

Do I need to declare if I reinvested my yield?

Yes. Reinvestment doesn’t defer taxation—you owe tax in the year yield was received, even if converted to other assets.

What if I used a privacy coin like Monero?

You still must declare earnings. Use third-party tools (e.g., Koinly) to track transactions. Non-disclosure risks penalties up to 150% of evaded tax.

Can I use tax software for DeFi reporting?

Yes. Tools like TaxScout or Declarando integrate with Spanish tax forms and automate EUR conversions. Ensure they support your DeFi protocols.

Staying Compliant in 2024

As Spain enhances crypto surveillance via Modelo 720 (foreign asset reporting), meticulous DeFi yield documentation is non-negotiable. Consult a gestor specializing in crypto taxes for complex cases. Proactive reporting avoids penalties and ensures you harness DeFi’s potential legally.