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Cryptocurrencies, Tax Ignorance and Tax Noncompliance in Direct Taxation: Spanish Empirical Evidence

Author

Listed:
  • Álvaro Hernández Sánchez

    (Independent Researcher, 05005 Avila, Spain)

  • Beatriz María Sastre-Hernández

    (DEKIS Research Group, Department of Economics, Faculty of Social and Legal Sciences, Catholic University of Ávila, 05005 Avila, Spain)

  • Javier Jorge-Vazquez

    (DEKIS Research Group, Department of Economics, Faculty of Social and Legal Sciences, Catholic University of Ávila, 05005 Avila, Spain)

  • Sergio Luis Náñez Alonso

    (DEKIS Research Group, Department of Economics, Faculty of Social and Legal Sciences, Catholic University of Ávila, 05005 Avila, Spain)

Abstract

This article highlights the complexity of taxation surrounding cryptocurrency transactions due to the lack of uniform regulation, creating uncertainty for both taxpayers and tax authorities. After determining the tax obligations of individuals in taxation, a survey has been conducted to assess the level of knowledge and compliance with tax obligations related to cryptocurrencies. The survey, in which 103 people participated, reveals the confusion and errors that prevail in perceptions of the tax obligations for cryptocurrencies, particularly in transactions such as swapping and staking in personal income tax. This results in almost half of the respondents (49.5%) not declaring any of their operations with cryptocurrencies. The reasons for this include the fact that the majority of respondents (66%) find the regulation of cryptocurrencies in Spain confusing and difficult to understand. Additionally, 87.4% believe that tax agencies should provide more information and resources on the taxation of cryptocurrencies and digital assets, and that there should be clearer and more comprehensive regulation. However, it should be noted that 41.7% also consider that tax regulation discourages investment in cryptocurrencies.

Suggested Citation

  • Álvaro Hernández Sánchez & Beatriz María Sastre-Hernández & Javier Jorge-Vazquez & Sergio Luis Náñez Alonso, 2024. "Cryptocurrencies, Tax Ignorance and Tax Noncompliance in Direct Taxation: Spanish Empirical Evidence," Economies, MDPI, vol. 12(3), pages 1-25, March.
    • Handle: RePEc:gam:jecomi:v:12:y:2024:i:3:p:62-:d:1351077
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    References listed on IDEAS

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    1. Zdenek Smutny & Zdenek Sulc & Jan Lansky, 2021. "Motivations, Barriers and Risk-Taking When Investing in Cryptocurrencies," Mathematics, MDPI, vol. 9(14), pages 1-22, July.
    2. Katherine Baer & Ruud De Mooij & Shafik Hebous & Michael Keen, 2023. "Taxing cryptocurrencies," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 39(3), pages 478-497.
    3. Auer, Raphael & Tercero-Lucas, David, 2022. "Distrust or speculation? The socioeconomic drivers of U.S. cryptocurrency investments," Journal of Financial Stability, Elsevier, vol. 62(C).
    4. Nikola Fabris & Milutin Ješić, 2023. "Are Gold and Bitcoin a Safe Haven for European Indices?," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 12(1), pages 27-44.
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