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

Introduction to DeFi Taxation in Spain

As decentralized finance (DeFi) gains traction in Spain, understanding how to report DeFi yield to the Spanish Tax Agency (Agencia Tributaria) is crucial. DeFi activities like staking, liquidity mining, and yield farming generate taxable income under Spanish law. This guide breaks down the reporting process step-by-step, helping you stay compliant while navigating Spain’s evolving crypto tax landscape.

Understanding DeFi Yield and Spanish Tax Rules

DeFi yield refers to rewards earned from participating in decentralized protocols, including:

• Staking rewards (e.g., from Proof-of-Stake networks)
• Liquidity provider (LP) fees and token incentives
• Lending interest from platforms like Aave or Compound
• Yield farming profits

In Spain, these earnings are classified as capital income or miscellaneous income under the Personal Income Tax (IRPF). Key principles:

• Taxable at progressive rates from 19% to 47%
• Must be declared in euros using fair market value at receipt
• Applies to residents and non-residents with Spanish-source income

Step-by-Step Guide to Reporting DeFi Yield

Step 1: Track All Yield Transactions

Document every DeFi yield event with:

• Date of receipt
• Type of reward (e.g., staking, LP)
• Amount in cryptocurrency
• Euro value at time of receipt (use exchange rates from Banco de España)

Step 2: Calculate Taxable Amount

For most DeFi yields:

• The full euro value at receipt is taxable income
• No cost basis applies (unlike asset sales)
• Example: Receiving €100 worth of UNI tokens = €100 taxable income

Step 3: Complete Tax Form 100 (IRPF)

Report DeFi yield in two sections:

1. Box 0206 (Rendimientos del capital mobiliario): For staking and lending yields
2. Box 0226 (Ganancias patrimoniales): For LP token rewards and airdrops

Consolidate all yields under “Otros rendimientos del capital mobiliario” if uncertain.

Step 4: Submit and Pay

• File Form 100 annually (April-June)
• Pay taxes via direct debit or bank transfer
• Keep records for 4 years

Critical Compliance Considerations

• Residency Rules: Spanish residents pay tax on worldwide DeFi income
• Form 720: Report foreign-held crypto assets exceeding €50,000
• Penalties: Up to 150% of unpaid tax for undeclared income
• Software Tools: Use Koinly or TokenTax for automated tracking

FAQs on Reporting DeFi Yield in Spain

Is DeFi yield taxed differently than other crypto in Spain?

Yes. Unlike capital gains from trading, DeFi yields are taxed as income at receipt. Subsequent sales trigger separate capital gains calculations.

What if I reinvest my DeFi rewards?

Reinvestment doesn’t defer taxation. You owe tax on the euro value when rewards are credited to your wallet, regardless of usage.

How do I value rewards in obscure tokens?

Use reputable exchanges (e.g., CoinMarketCap) for EUR pricing. If unavailable, document your valuation method.

Are there tax exemptions for small amounts?

No blanket exemptions exist. However, the first €1,600 of miscellaneous income may qualify for a 40% reduction under IRPF rules.

Do I report yield from Spanish-based DeFi platforms differently?

No. Tax treatment depends on the income nature, not the protocol’s location. All yield requires declaration.

Conclusion: Stay Proactive with Compliance

Accurately reporting DeFi yield in Spain demands meticulous record-keeping and understanding of IRPF requirements. As regulations evolve, consult a Spanish crypto tax specialist for personalized advice. Proper reporting avoids penalties and ensures you harness DeFi’s potential while remaining compliant with Agencia Tributaria guidelines.

Disclaimer: This guide provides general information, not tax advice. Consult a qualified professional for your specific situation.