Tax treatment of cryptocurrency scam losses in Personal Income Tax (IRPF)

The rise of digital assets has brought new financial risks, including scams. Faced with uncertainty regarding how to treat these losses in the tax return, the Dirección General de Tributos (DGT) has issued a relevant ruling on the possibility of accounting for these amounts as capital losses in Personal Income Tax (IRPF).

What the DGT has ruled

The inquiry addresses the possibility of integrating the amount lost due to a cryptocurrency scam into the IRPF tax base. The ruling establishes that the amount of a scam constitutes a capital loss, in accordance with the provisions of Article 33.1 of Law 35/2006.

However, the resolution emphasizes that this amount will not be accounted for automatically. For the loss to be tax-deductible, the taxpayer must prove its existence through evidence admitted under Law. It is important to note that, as it does not derive from a transfer of assets, this loss is integrated into the general tax base of the tax.

What this means for you

If you have been a victim of fraud related to crypto-assets, it does not mean that the loss is irrelevant to your tax situation. Nevertheless, the burden of proof lies with the taxpayer. It is not enough to declare the loss; it is necessary to provide documentation that demonstrates the veracity of the event and the amount of the damage.

The sufficiency of such evidence is not a subjective matter for the taxpayer; rather, the assessment of whether the documentation provided is adequate corresponds exclusively to the tax management and inspection bodies.

What you should do

In a situation like this, it is fundamental to collect all documentary evidence that allows for the demonstration of the fraud. This includes communications with platforms, records of the transactions carried out, and any other legal proof that supports the loss suffered. Since the integration of these losses is carried out in the general tax base, correct documentation is key to avoiding contingencies with the Tax Administration. It is recommended to evaluate each particular situation to determine the most solid accreditation strategy.