Trading in the Renta: how to declare shares, ETFs, CFDs, forex and options

If you trade with your own money, every purchase and sale of shares, ETFs, CFDs, currencies, futures or options produces a capital gain or loss: the difference between what you paid and what you obtained upon closing. The Ley 35/2006 (the Spanish Personal Income Tax Act) defines them as variations in the value of your wealth that appear when its composition is altered (artículo 33).

These gains and losses go to the savings taxable base, because they arise from transferring wealth elements (artículo 46). They are not added to your salary: they have their own scale, from 19% to 30%, which is the same in all common regime autonomous communities.

The moment that counts is the closing of the trade, not the withdrawal of the money. The law attributes gains and losses to the year in which the wealth alteration occurs (artículo 14.1.c). If you closed a position with a profit in December and left the balance with the broker, that profit goes into the Renta for that year.

Positions that remain open on 31 December are not declared yet. Dividends and broker interest are something else: returns on movable capital, also in the savings base but in a different balance.

The gain is the transfer value minus the acquisition value (artículo 34). For listed securities, the transfer value is the quoted price on the day of the sale, or the agreed price if it is higher (artículo 37.1.a).

Broker commissions count. Purchase commissions are added to the acquisition value and sale commissions are subtracted from the transfer value, because the law includes the expenses and taxes inherent to the transaction (artículo 35). Platform subscriptions, courses or market data are not transaction expenses and are not deducted.

When you have bought the same share or the same ETF several times, FIFO applies: it is understood that you sell first the ones you bought first (artículo 37.2). You cannot choose the batch or use the average price shown by the broker application (consultations V0842-21 and V1185-18 of the DGT, the Spanish Directorate-General for Taxes).

If you trade in dollars or another currency, the purchase and sale are converted to euros using the exchange rate of the date of each one. Thus, a share that has not gone up in dollars can give you a gain or loss in euros just because of the exchange rate.

ETFs are taxed like shares when you sell them, but they do not benefit from the tax-free transfer (traspaso) available to investment funds: moving from one ETF to another means selling and buying, and the gain is declared that year. Furthermore, the sale of an ETF has no withholding tax, so everything is adjusted in the Renta.

Managora does this calculation in its trading tax report: it converts currencies, applies FIFO and the two-month rule and gives you the figures for each box in Renta Web. You can see the updated amount on the file.

It is the rule that prevents selling at a loss and repurchasing immediately just to lower the tax. If you sell listed securities at a loss and have bought homogeneous securities (the same share or the same ETF) in the two months before or after the sale, that loss is not computed at the time of the sale (artículo 33.5.f). For unlisted securities, the period is one year (artículo 33.5.g).

The loss does not disappear: it is postponed. It is integrated when you sell the repurchased securities that remain in your portfolio. The DGT explains it as a two-phase procedure in consultation V0842-21, and already analysed the case of someone who buys and sells the same share several times in the year in V0913-08.

The typical risk is in December: selling in the red to offset gains and repurchasing a few days later. That loss is of no use to you in the Renta for the year if you keep the repurchased securities on 31 December.

The rule is written for securities and participations. If your losses come from CFDs, forex or options, review the specific case before applying or discarding it.

CFDs and contracts on currency pairs (forex) yield capital gains or losses, and the DGT indicates that they are recorded in the section for gains and losses derived from the transfer of wealth elements (consultation V0917-14, on CFDs on indices and currency pairs). Under the current law, they go to the savings base.

Forex with a foreign broker is treated the same way. Consultation V1342-14 analyses the case of an individual who traded with a Cypriot investment services company through a dollar account, and classifies it as capital gains and losses.

Options also generate capital gains or losses in the savings base, attributed to the year in which the position is closed, exercised or expires (consultation V1946-20, on options in the official Spanish market and on other platforms). The premium you collect when selling an option is not declared on the day you collect it, but when the position is closed or expires. Futures follow the same logic: the result upon closing counts.

For a retail investor in Spain, CFDs have limited leverage (between 30:1 and 2:1 depending on the underlying asset), automatic closure when the margin falls to 50% and protection against negative balances, due to the measures of the CNMV (the Spanish National Securities Market Commission) of June 2019. With a regulated broker, your loss should not exceed what you deposited.

Within the savings base there are two balances (artículo 49). One gathers capital gains and losses: shares, ETFs, funds, CFDs, forex, options and cryptocurrencies. Another gathers returns on movable capital: dividends, interest and coupons.

First, everything is offset within each balance. If gains and losses result in a negative figure, that negative amount is subtracted from the positive balance of dividends and interest with a limit of 25% of that balance. It works the same way in reverse.

Whatever is left over is carried forward to the following four years, in the same order. It must be offset in the maximum amount allowed each year: you cannot save it for a better year (artículo 49.2). After the fourth year, the loss is lost.

Trading losses are not subtracted from your salary or from rent: those incomes go to the general base, and the two bases do not mix. That is why it is advisable for every loss to appear on a tax return, even if you are not obliged to file one that year.

A foreign broker does not apply Spanish withholding tax to you: neither on sales nor on dividends. Everything you earn is paid in the Renta, all at once, in June.

Dividends are taxed as returns on movable capital (artículo 25.1.a) for their gross amount, before the withholding tax of the country of origin. If that country withheld tax from you, you can apply the deduction for international double taxation (artículo 80): you deduct the lesser of what was paid abroad and what results from applying your effective average savings rate to that dividend.

If the country of origin withheld more from you than the double taxation agreement with Spain allows, the excess is not recovered in the Spanish Renta: it is claimed in that country. For United States shares, the W-8BEN form serves for the broker to apply the agreement rate from the beginning.

Form 720 is an informative return: it does not pay tax, it only communicates to Hacienda (the Spanish Tax Agency, AEAT) what you have outside Spain. You are obliged to file it if, on 31 December, any of its blocks exceeds €50,000: accounts abroad, securities and rights deposited or managed abroad (shares, ETFs, funds), or real estate.

It is filed between 1 January and 31 March of the following year. Once filed, it only needs to be filed again if the block increases by more than €20,000 compared to the last return, or if something declared is cancelled or you cease to be the owner.

Since the judgment of the Court of Justice of the European Union of 27 January 2022 and Ley 5/2022, a 720 filed late or with errors is penalised under the general regime of the Ley General Tributaria (the Spanish General Tax Act), not with the specific fines that existed before.

Cryptocurrencies custodied outside Spain do not go on the 720, but on form 721, with the same threshold of €50,000. If your foreign broker has a branch in Spain and custodies the securities there, the block might not count: check it with the entity's statement.

Managora prepares and files form 720 with the valuation of each block on 31 December: you can see the updated amount on the file.

Making a living from trading with your own money does not make you an autónomo (freelancer) for Renta purposes. Economic activity requires organising production means or human resources on your own account to produce or distribute goods or services (artículo 27), and buying and selling your own securities does not fit there. Even if you trade daily and it is your only income, it remains a capital gain or loss in the savings base.

Funded accounts (prop firms) are something else. You trade the company's capital, not your own, and what you collect is a part of the profits you generate for it. That payment does not arise from a variation in your wealth: Hacienda's criterion is to treat it as a return from an economic activity, in the general base, with the progressive scale and not with the savings scale.

As an activity, you can subtract linked expenses, such as the exam or challenge fee, and census registration and Seguridad Social (the Spanish Social Security system) are considered. Managora separates in your statements what is a capital gain from what is an activity and prepares the tax return with that criterion.