Cashback and crypto rewards: how to declare

Many crypto platforms offer rewards in the form of cashback in Bitcoin, stablecoins or other tokens for using debit cards, purchasing on platforms or holding assets. How are they taxed?

Types of rewards programs

Cashback for using a crypto card (Crypto.com, Binance Card…)

Every time you pay with the crypto card, you receive a percentage in tokens (CRO, BNB...).

Tax classification: Capital gain not derived from transmission (like an airdrop), on the general personal income tax basis, at the market value at the time of accreditation.

Acquisition cost of the tokens received: The market value at the time of the cashback.

Rewards for referrals

If you earn crypto by referring friends to a platform:

Tax classification: Return on capital or capital gain, depending on whether there is a capital investment involved.

If you simply refer a friend without investing → capital gain.
If the reward depends on the assets that the referral invests in the same platform where you also have assets → it may be return on capital.

Loyalty points convertible into crypto

If the platform gives you points that you then convert into crypto:

• The points themselves may not be taxable (it's a discount, like airline miles).
• When you convert points to crypto and the conversion has economic value, the taxable event may arise.

The DGT has limited criteria on loyalty programs. The conservative stance is to declare at the time of conversion to crypto.

Staking on card (lock tokens to obtain tier)

Some crypto cards require token staking to access cashback. The staking rewards themselves are taxed as return on capital.

Cashback timing: when to declare

The general rule is to declare at the moment of crediting the cashback, not when you are going to sell it.

If the cashback is credited monthly:

• You calculate the value in EUR of each monthly credit.
• Add all the cashbacks of the year.
• You declare the total as income in the general income tax base.

What if the cashback falls in value?

If you receive 100 CRO as cashback (valued at €50 that day) and then the CRO drops to €0.01:

• You declare €50 as income in the year of receipt.
• When you sell them (for almost nothing), you declare a capital loss of ~€50.
• The €50 loss is offset by other capital gains.

Conclusion

Cashback and crypto rewards programs generate reportable income in the year of accreditation. Although the individual amounts are usually small, if you actively use the card throughout the year, the total can be relevant. Keep a record of each cashback with date, amount and market price.