Yield Farming in Spain: Complete Tax Guide on How DeFi Returns Are Taxed

Yield farming has become one of the most popular strategies for generating passive returns in the DeFi ecosystem. You deposit liquidity into a protocol, receive reward tokens, and —if all goes well— your assets grow. However, from a Spanish tax perspective, every step in this process has tax implications that most investors either don’t know about or underestimate.

This article breaks down, with practical examples and real calculations, exactly how each component of yield farming is taxed: from the initial deposit to the final sale of rewards, including impermanent loss and the multiple layers of intermediary tokens that characterize these strategies.

Yield farming (or "farming" for returns) is a DeFi strategy that consists of depositing cryptoassets into decentralized protocols to generate rewards. Unlike traditional staking, farming usually involves multiple layers of operations: providing liquidity, receiving LP tokens, depositing those LPs into "farms" to receive incentive tokens, and frequently automatic reinvestment (auto-compounding).

Typical components of a farming strategy:

1. Initial deposit: You contribute one or more tokens to a liquidity pool
2. Receiving LP tokens: The protocol issues tokens that represent your share
3. Staking LP tokens: You deposit those LPs into a "farm" to receive additional rewards
4. Rewards: You receive protocol tokens (UNI, CAKE, CRV, etc.) as incentives
5. Claim/Harvest: You periodically claim accumulated rewards
6. Sell or reinvest: You sell the rewards or reinvest them to compound returns

Each of these steps has specific tax consequences in Spain. The problem is that many investors only consider the final conversion to euros, ignoring the multiple intermediate taxable events.

IRPF savings tax brackets 2025:

• Up to €6,000: 19%
• €6,000 - €50,000: 21%
• €50,000 - €200,000: 23%
• €200,000 - €300,000: 27%
• Over €300,000: 28%

The tokens you receive as a reward for farming have a specific tax treatment that many investors misunderstand.

Tax classification: investment income

Farming rewards are considered investment income, not capital gains. This distinction is crucial because:

1. They are taxed when you receive them, not when you sell them
2. The value to report is the market price in EUR at the exact moment of the claim
3. FIFO does not apply to determine the income (the value is already defined)
4. They set a new acquisition cost for future sales

Why income and not capital gains? The AEAT considers rewards to be compensation for lending your capital (liquidity) to the protocol, conceptually similar to interest from a bank deposit or stock dividends. They do not come from a disposal of assets, but from holding a productive position.

Practical example: CAKE farming on PancakeSwap

Scenario:
- You deposit BNB/BUSD liquidity into PancakeSwap
- You receive LP tokens and stake them in the CAKE farm
- During January you receive 50 CAKE as rewards
- CAKE price at the time of claim: €3/CAKE

Tax calculation:
Investment income: 50 CAKE × €3 = €150
Tax (19% first bracket): €28.50

Acquisition value for future sales:
50 CAKE with a cost of €3/token = €150 total

If in March you sell those 50 CAKE at €5:
Capital gain: (€5 - €3) × 50 = €100
Additional tax (19%): €19

Total taxes paid: €28.50 + €19 = €47.50
Net profit after taxes: €150 + €100 - €47.50 = €202.50

Multiple claims and aggregation

If you make multiple claims during the year (as is usual), each one generates independent income that you must record:

Annual example:
- January: claim 50 CAKE at €3 → €150 income
- March: claim 30 CAKE at €4 → €120 income
- June: claim 45 CAKE at €2.50 → €112.50 income
- October: claim 60 CAKE at €3.20 → €192 income

Total annual income: €574.50
Base tax (19%): €109.16

CAKE inventory (for future FIFO):
- 50 CAKE @ €3
- 30 CAKE @ €4
- 45 CAKE @ €2.50
- 60 CAKE @ €3.20
= 185 CAKE with weighted average cost: €3.10/CAKE

Many farming protocols and vaults offer auto-compounding: automatic reinvestment of rewards to maximize APY. From a tax perspective, this is a nightmare.

Why auto-compounding creates multiple taxable events

Each time a vault reinvests your rewards automatically, the following tax events occur:

1. Receipt of the reward: Investment income (even if you don’t "see" it in your wallet)
2. Swap of the reward into pool tokens: Swap → Capital gain (usually €0 if instantaneous)
3. Deposit of the new tokens into the pool: Another swap
4. Receipt of additional LP tokens: New asset with a new acquisition cost

If the vault auto-compounds every hour (like Beefy Finance), you technically generate 24 taxable events per day just from the reinvestment process.

Practical strategies to handle auto-compounding

Option 1: Simplified reporting (medium risk) Report only the net increase in the vault value between entry and exit. You argue that auto-compounding does not create an effective gain because rewards are reinvested immediately. This interpretation is not validated by the AEAT but is the most practical.

Option 2: Strict reporting (conservative) Reconstruct each reinvestment as a separate taxable event. You will need specialized tools for DeFi portfolio analysis to extract all contract events.

Option 3: Avoid auto-compound Use protocols with manual claiming so you can control exactly when taxable events occur. Less efficient APY, but much simpler tax-wise.

Comparative example: manual vs auto-compound

Investment: €10,000 in an ETH/USDC vault
Estimated APY: 20% annually
Duration: 1 year

Manual claim (monthly):
- 12 claims of ~€166 each
- 12 taxable income events
- Total income: €2,000
- Documentation: 12 records

Auto-compound (hourly):
- 8,760 reinvestments per year
- Technically 8,760+ taxable events
- Total reportable income: ~€2,000 (same)
- Documentation: impossible manually

Practical auto-compound solution:
- Report net vault increase: €2,200 (includes compounding effect)
- Argue as aggregated income
- Risk: AEAT could request a detailed breakdown

Before farming, you need LP tokens. And obtaining those LP tokens already creates tax obligations.

Initial deposit = swap

When you deposit ETH + USDC into a Uniswap pool to receive LP tokens, you are executing a swap: you give two assets in exchange for a new one (the LP token). If ETH’s market value changed since you bought it, that difference is a capital gain.

Example:
Original purchase: 1 ETH at €2,000 (January)
Deposit into pool: 1 ETH + 2,500 USDC when ETH = €2,500 (March)

Taxable event on deposit:
- Transfer value of ETH: €2,500
- Acquisition value of ETH: €2,000
- Capital gain: €500

- Transfer value of USDC: €2,500
- Acquisition value of USDC: €2,500 (assuming 1:1)
- Gain: €0

Total gain on deposit: €500
Tax (19%): €95

New asset:
ETH/USDC LP tokens with acquisition cost: €5,000

Common mistake: Not reporting this gain because you think you "only moved crypto". For the AEAT, receiving a different asset (LP token) in exchange for delivering others (ETH + USDC) is a disposal.

How it affects later farming

The acquisition cost of your LP tokens is the basis for calculating gains when you withdraw liquidity or sell positions. If you don’t record the initial value correctly, your future calculations will be wrong.

For a complete guide on how liquidity provision is taxed and its special cases, see our guide on the taxation of DEX protocols where we analyze specific cases for Uniswap, Curve, and other AMMs.

Impermanent loss (IL) is the loss of value you suffer when providing liquidity and the price ratio between the two pool tokens changes. It is one of the most confusing concepts from a tax perspective.

Key rule: IL is not deductible while it remains in the pool

While your funds remain in the pool, impermanent loss is an unrealized loss. The AEAT does not allow deducting potential losses—only losses materialized through an actual disposal of the asset.

Example:
Initial deposit: 1 ETH (€3,000) + 3,000 USDC = €6,000

Three months later (ETH rises to €5,000):
- If you had HODLed: 1 ETH (€5,000) + 3,000 USDC = €8,000
- Current value in pool: ~€7,400 (due to IL)
- Impermanent loss: €600

Can you deduct that €600 loss?
NO. The IL has not materialized.

The farming rewards you received ARE taxable.
You can be paying taxes on rewards while suffering IL.

IL materializes when you withdraw liquidity

Impermanent loss becomes a real tax loss only when you withdraw liquidity. At that moment, you compare:

• Value of what you recover (tokens you receive when burning LP)
• Acquisition value of the LP tokens (what you paid when depositing)

Continuation of the example:
You withdraw liquidity:
- You burn LP tokens (acquisition cost: €6,000)
- You receive: 0.8 ETH (€4,000) + 4,000 USDC
- Value recovered: €8,000

Tax calculation:
Capital gain: €8,000 - €6,000 = €2,000

Where is the IL?
The IL is "absorbed" in the calculation. You recovered €8,000 instead of
the €10,000 you would have had if you had HODLed, but tax-wise
only the €2,000 gain versus your original investment matters.

If the pool had gone badly and you recovered only €5,000:
Capital loss: €5,000 - €6,000 = -€1,000
This loss IS deductible and offsets other gains.

Not all yield farming is the same. Each type has specific tax nuances.

1. Liquidity mining on DEXs (Uniswap, PancakeSwap, Curve)

Mechanism: You provide liquidity to an AMM and receive LP tokens + protocol rewards.

Taxation:

• Deposit: Swap → Potential capital gain
• Accumulated trading fees: Income embedded in the LP token value
• Rewards (UNI, CAKE, CRV): Investment income at claim
• Withdrawal: Capital gain/loss on LP tokens

Curve Finance example:

You deposit 10,000 USDC into the 3pool (USDC/DAI/USDT)
You receive: 10,000 3CRV tokens

No initial gain (stablecoins do not fluctuate)

You stake the 3CRV in the Curve gauge:
You receive: 50 CRV weekly @ €0.50 = €25/week
Monthly income: ~€100

Annual: €1,200 in CRV rewards
Tax (19%): €228

When withdrawing, if the pool grew from fees:
You recover 10,500 USDC equivalent
Gain: €500 (from accumulated fees)
Tax: €95

2. Leveraged farming (Alpaca Finance, Francium)

Mechanism: You borrow funds to multiply your farming position.

Special tax treatment:

• Loan received: Not taxable (not income)
• Interest paid: NOT deductible in IRPF for individuals
• Liquidation: Capital loss if you lose collateral
• Amplified rewards: Taxed the same way, but larger amounts

Example leveraged farming:
Collateral: 1,000 USDC
Leverage: 3x
Total position: 3,000 USDC in the pool

Annual rewards (assuming 20% APY):
- Without leverage: 200 USDC → €38 tax
- With 3x: 600 USDC → €114 tax

But if there is severe IL + a price drop:
- Collateral liquidation
- Loss: 1,000 USDC
- Deductible against other gains

Tax risk: Leverage amplifies both gains and losses, but taxes are paid on gross gains while losses only offset if they are in the same year or the next 4 years.

3. Liquid staking + DeFi (Lido + farming)

Mechanism: You stake ETH in Lido, receive stETH, and use that stETH for additional farming.

Tax layers:

Layer 1: Staking in Lido
- You deposit 10 ETH at €3,000 = €30,000
- You receive 10 stETH
- SWAP: If ETH changed in price, there is a gain
- Acquisition cost of stETH: €30,000

Layer 2: Accumulation of staking rewards
- stETH appreciates relative to ETH (rebasing)
- Increase of ~4% annually
- INCOME: 0.4 stETH × €3,000 = €1,200 annually
- Taxed as investment income

Layer 3: Farming with stETH (e.g., Curve stETH/ETH)
- You deposit stETH into the pool
- Another SWAP: stETH → LP token
- Additional rewards in CRV/LDO
- More INCOME to report

Layer 4: Final withdrawal
- You burn LP, recover stETH
- You unstake stETH → ETH
- You sell ETH → EUR
- Final CAPITAL GAIN

These layered strategies require specialized DeFi portfolio tracking so you don’t miss any tax events.

4. Yield aggregators (Yearn, Beefy, Convex)

Mechanism: You deposit into a vault that automatically optimizes farming strategies.

Special feature: The vault manages everything internally, but tax-wise each internal operation is yours.

Yearn USDC vault example:
You deposit 10,000 USDC
You receive yvUSDC (vault token)

Internally, the vault:
- Deposits into Aave → generates aUSDC + rewards
- Moves to Compound → generates cUSDC + COMP
- Sells COMP → more USDC
- Re-deposits

Each internal operation is technically taxable,
but you only see: you deposited 10,000, you withdrew 10,800.

Practical approach:
- Report €800 as vault income
- Document deposit and withdrawal hashes
- Risk: AEAT could request an internal breakdown

Case 1: Conservative farmer on Curve

Profile: Investor seeking stable yield in stablecoins.

2024 operations:

1. January: Buys 20,000 USDC at €1 = €20,000
2. January: Deposits into Curve 3pool, receives 20,000 3CRV
3. January: Stakes 3CRV in the gauge, activates boost with veCRV
4. During the year: Monthly CRV claims (total 400 CRV)
5. December: Withdraws everything, receives 20,800 USDC equivalent

Detailed tax calculation:

Deposit (January):
- USDC did not change in price
- Gain on deposit: €0
- Acquisition cost of 3CRV: €20,000

CRV claims (monthly):
- January: 30 CRV × €0.60 = €18
- February: 32 CRV × €0.55 = €17.60
- March: 35 CRV × €0.50 = €17.50
- April: 33 CRV × €0.45 = €14.85
- May: 34 CRV × €0.40 = €13.60
- June: 33 CRV × €0.35 = €11.55
- July: 34 CRV × €0.38 = €12.92
- August: 33 CRV × €0.42 = €13.86
- September: 34 CRV × €0.48 = €16.32
- October: 35 CRV × €0.52 = €18.20
- November: 33 CRV × €0.55 = €18.15
- December: 34 CRV × €0.58 = €19.72

Total CRV income: €192.27
Tax on income (19%): €36.53

Withdrawal (December):
- Burns 20,000 3CRV
- Receives 20,800 USDC (includes pool fees earned)
- Transfer value: €20,800
- Acquisition cost: €20,000
- Capital gain: €800
- Tax on gain (19%): €152

TAX SUMMARY:
- CRV income: €192.27 (tax €36.53)
- Pool fee gain: €800 (tax €152)
- Total taxes: €188.53
- Net profit: €992.27 - €188.53 = €803.74

CRV inventory (if not sold):
400 CRV with total cost €192.27 = €0.48/CRV average

Case 2: Active multi-protocol farmer

Profile: Investor optimizing farming across several protocols.

2024 operations:

1. January: 5 ETH bought at €2,000 = €10,000
2. February: Swap 2.5 ETH → 6,000 USDC on Uniswap (ETH = €2,400)
3. February: Deposits 2.5 ETH + 6,000 USDC into a Uniswap pool
4. Feb-May: Farms on Uniswap, claims 200 UNI
5. June: Withdraws liquidity, receives 2.2 ETH + 7,000 USDC
6. June: Moves everything to PancakeSwap (BSC)
7. Jun-Nov: Farms CAKE, claims 150 CAKE
8. December: Sells all rewards (UNI + CAKE)

Detailed tax calculation:

Swap ETH → USDC (February):
- Transfer value: 2.5 ETH × €2,400 = €6,000
- Acquisition cost (FIFO): 2.5 ETH × €2,000 = €5,000
- Gain: €1,000

Uniswap deposit (February):
- Remaining ETH: 2.5 ETH
- Transfer value of ETH: 2.5 × €2,400 = €6,000
- Acquisition cost of ETH (FIFO): 2.5 × €2,000 = €5,000
- Gain on deposit: €1,000

- USDC: 6,000 at €1
- No gain on USDC

Acquisition cost of Uniswap LP: €12,000

UNI claims (Feb-May):
- 200 UNI at average price €8 = €1,600
- Investment income: €1,600

Uniswap withdrawal (June):
- Receives: 2.2 ETH (€2,800/ETH) + 7,000 USDC
- Value recovered: €6,160 + €7,000 = €13,160
- LP cost: €12,000
- Gain: €1,160

Bridge to BSC:
- No taxable event (same assets)
- Gas: ~€50 (deductible in future operations)

CAKE claims (Jun-Nov):
- 150 CAKE at average price €3.50 = €525
- Investment income: €525

Reward sales (December):
- 200 UNI sold at €10 = €2,000
  - Acquisition cost: €1,600
  - Gain: €400

- 150 CAKE sold at €4 = €600
  - Acquisition cost: €525
  - Gain: €75

2024 TAX SUMMARY:

Capital gains:
- Swap ETH→USDC: €1,000
- Uniswap deposit: €1,000
- Uniswap withdrawal: €1,160
- UNI sale: €400
- CAKE sale: €75
Total gains: €3,635

Investment income:
- UNI claims: €1,600
- CAKE claims: €525
Total income: €2,125

TOTAL SAVINGS BASE: €5,760
Tax (19% first bracket): €1,094.40

Case 3: Leveraged farming with partial liquidation

Profile: Aggressive investor maximizing APY with leverage.

2024 operations:

1. March: Deposits 2,000 USDC as collateral in Alpaca Finance
2. March: Opens a 3x position in an ETH/USDC pool (6,000 USDC exposure)
3. April: ETH drops 30%, position partially liquidated
4. April: Remaining collateral 800 USDC + 100 ALPACA rewards
5. May: Closes position, recovers 750 USDC + 100 ALPACA

Tax calculation:

Opening the position (March):
- Collateral deposited: 2,000 USDC
- Loan received: 4,000 USDC (not taxable)
- Swap into LP: technically a taxable event
- But with no price variation: €0 gain

During farming:
- Rewards 100 ALPACA @ €0.30 = €30
- Investment income: €30

Partial liquidation (April):
- Loss of 1,200 USDC from collateral
- This loss materializes: -€1,200

Final close (May):
- Recovers 750 USDC
- Additional loss: 800 - 750 = 50 USDC

SUMMARY:
- ALPACA income: €30 → Tax €5.70
- Collateral loss: 2,000 - 750 = €1,250

Net tax effect:
- Capital loss: €1,250
- Income: €30

The €1,250 loss offsets other capital gains in the year.
If there are not enough gains, it carries forward 4 years.

Note: The 4,000 USDC loan was repaid through
liquidation; there is no outstanding debt or taxable event.

If your farming positions exceed €50,000 on December 31, you must file Modelo 721 to report cryptocurrencies held abroad.

What to include in Modelo 721

Farming positions to consider:
✓ LP tokens in liquidity pools
✓ LP tokens staked in farms
✓ Unclaimed rewards (even if you haven’t claimed them)
✓ Positions in yield aggregator vaults
✓ Collateral deposited in lending protocols
✓ Staked tokens (stETH, rETH, etc.)

How to value:
- LP tokens: market value of the underlying (not the "number" of LPs)
- Unclaimed rewards: EUR value at valuation time (Dec 31)
- Vaults: vault token value × price

Example 721 calculation:

Positions as of December 31:
- 500 UNI-V2 ETH/USDC (equivalent to 3 ETH + 10,000 USDC)
  → 3 × €3,500 + €10,000 = €20,500

- 10,000 yvUSDC in Yearn
  → €10,500 (vault grew 5%)

- 200 CRV pending claim
  → 200 × €0.60 = €120

- 5 stETH in Lido
  → 5 × €3,500 = €17,500

TOTAL: €48,620 → Does NOT exceed €50,000, Modelo 721 not mandatory

If ETH had been at €3,800:
- LP: €11,400 + €10,000 = €21,400
- stETH: €19,000
- Total: €51,020 → Modelo 721 IS mandatory

For a detailed guide on Modelo 721 and how it affects your DeFi positions, see our guide on Modelo 721 and cryptocurrencies.

These are the most common mistakes we see in farming portfolio analysis:

Mistake 1: "Rewards aren’t taxed until I sell them"

Incorrect. Rewards are taxed as investment income at the time of claim, at the market value in EUR at that moment. The later sale creates an additional capital gain/loss.

Consequence: Unreported income for years. 50-150% penalty + interest.

Mistake 2: "Impermanent loss gives me losses I can deduct"

Incorrect. IL is only deductible when you withdraw liquidity and materialize the loss. While it remains in the pool, it is an unrealized loss and not deductible.

Consequence: Reporting unrealized losses. The AEAT can reject them and apply a penalty.

Mistake 3: "I use the same acquisition cost for all my rewards"

Incorrect. Each claim has its own acquisition value (token price at that moment). When selling, you must apply FIFO using the chronological order of claims.

Consequence: Incorrect gain calculations that may benefit you or hurt you.

Mistake 4: "Auto-compounding doesn’t create taxable events"

Debatable. Technically each reinvestment is a tax event. In practice, many report only the net result, but there is no AEAT doctrine supporting it.

Consequence: Risk of an information request demanding a detailed breakdown.

Mistake 5: "I don’t report because nobody knows what I do in DeFi"

Incorrect. With DAC8 (from 2026), exchanges will automatically report all inflows and outflows. The AEAT will be able to infer your DeFi activity from balance discrepancies. More details in our guide on DAC8 and DeFi.

Consequence: Statute of limitations extended to 10 years if you don’t file Modelo 721, aggravated penalties for concealment.

Tracking farming operations manually is almost impossible at high volume. These tools help:

For visualization

• DeBank: Excellent for viewing positions across multiple chains
• Zapper: Clear interface, good farm detection
• APY.Vision: Specialized in tracking IL and farming performance

For tax export

• Rotki: Open source, allows exporting operations
• CoinTracking: Detects some basic DeFi operations
• Koinly: Limited DeFi support but improving

For professional analysis

If you operate across multiple protocols, chains, and complex strategies, automated tools have significant limitations. The professional DeFi portfolio analysis combines technical tools with expert review to:

• Detect operations that automated trackers miss
• Classify correctly under Spanish AEAT criteria
• Value illiquid or exotic positions
• Handle auto-compounding, leverage, and liquidations

You can see more options in our comparison of tools to track cryptocurrencies.

Are farming rewards taxed as income or capital gains?

As investment income. The tokens you receive as farming rewards (UNI, CAKE, CRV, etc.) are taxed at their market value in EUR at the time of claim. It is similar to receiving dividends or interest.

When are rewards taxed: when I receive them or when I sell them?

When you receive them (claim). The taxable event occurs when you claim rewards, not when you sell them. The later sale creates an additional capital gain/loss if the price changed since the claim.

Can I deduct impermanent loss from my taxes?

Only when you withdraw liquidity. Impermanent loss is unrealized while your funds are in the pool. It materializes as a deductible capital loss only when you burn your LP tokens and recover the underlying assets at a lower value than what you deposited.

How do I report if I use auto-compounding vaults?

There are two approaches. The conservative approach reports each reinvestment as a separate event (very complex). The practical approach reports the net increase of the vault as aggregated income. The AEAT has no specific doctrine, so document your methodology well.

Does depositing into a liquidity pool create taxes?

It can. Depositing tokens into a pool is a swap (you deliver ETH+USDC, you receive LP tokens). If the market value of the tokens you deliver differs from their acquisition cost, there is a capital gain. This typically happens when the token price changed since you bought it.

Do I have to report farming if I never converted to euros?

Yes. Rewards are taxed when received, regardless of whether you sold them for EUR. Swaps and exchanges in DeFi also create taxable events without needing to "cash out" to fiat.

How do I apply FIFO if I made multiple claims of the same token?

Each claim establishes a lot. If you made 12 CRV claims during the year at different prices, you have 12 lots with different acquisition costs. When selling, you assign sales to the oldest lots first (FIFO).

What if the farming protocol was hacked and I lost funds?

It is a deductible capital loss. If you can prove you had funds in the protocol and that the hack caused the loss (via transaction hashes and incident documentation), you can report the loss. It offsets other capital gains in the same year or the next 4 years.

Do I need to file Modelo 721 because of my farming positions?

If they exceed €50,000 on December 31, yes. Sum the market value of all your LP tokens, vault positions, unclaimed rewards, and staked tokens. If the total exceeds €50,000, you must file Modelo 721 before March 31.

Are interest payments on leveraged loans deductible?

Not for individuals. Under IRPF, interest on loans for personal investment is not deductible from the income or gains obtained. If you operate as an economic activity (company/self-employed), the treatment may differ.

How do I document my farming operations for the tax authorities?

Keep transaction hashes. Each deposit, claim, withdrawal, and swap has a unique on-chain hash that serves as your documentary proof. Complement it with explorer screenshots (Etherscan, BSCScan) showing amounts and dates. For complex portfolios, consider using professional analysis services that generate auditable reports.

What if I didn’t report farming in previous years?

You have regularization options. If the filing deadline hasn’t closed, file an amended return. If it has closed but there is no request, file a voluntary late return (lower surcharges). If there is already a request, penalties will be higher. The sooner you regularize, the less you will pay. See our guide on crypto tax filing mistakes for more details.

Yield farming can generate attractive returns, but the tax complexity is significant. Each claim, each deposit, each withdrawal has tax consequences that, if ignored, can turn a profitable strategy into a problem with the tax authorities.

Keys to tax-efficient farming:

1. Document from day one: Hash of every transaction, EUR price at each moment
2. Separate income from gains: Rewards are income at claim, sales are capital gains
3. Don’t ignore the initial deposit: The swap into LP tokens can generate a gain
4. IL is not deductible in the pool: Only when withdrawing do you materialize the loss
5. Be careful with auto-compound: Choose your reporting approach and stick to it
6. Check Modelo 721: If you exceed €50,000 in DeFi positions, it is mandatory
7. Plan for DAC8: In 2-3 years, DeFi opacity will be history

Recommended next steps:

• If you farm actively: Implement systematic tracking or hire professional portfolio tracking
• If you have doubts about past filings: Request a portfolio analysis to assess pending obligations
• If you need certified tax calculations: Our tax settlement service prepares the forms ready to file
• For ongoing advisory: Specialized crypto tax advisory supports you throughout the year

Reporting correctly not only avoids penalties: it lets you legally optimize your tax burden and sleep well knowing you comply with the rules.

At Cleriontax we specialize in advanced DeFi taxation. Our team combines technical on-chain protocol knowledge with tax experience to offer you:

• Multichain analysis: Ethereum, BSC, Polygon, Arbitrum, Optimism, Avalanche and more
• Detection of all claims: Even if you don’t export them, we find them on-chain
• Correct valuation of LP tokens: We calculate the underlying value, not just the token count
• IL treatment: We integrate impermanent loss into calculations correctly
• Auditable reports: Documentation valid for AEAT information requests

Request an analysis of your farming portfolio →

Disclaimer: This article is for informational and educational purposes. It does not constitute personalized tax advice. Tax rules are subject to interpretation and every personal situation is unique. Always consult a professional tax advisor before making tax decisions.

Last updated: December 2025

Published by: Cleriontax Team – Specialists in DeFi Taxation and On-Chain Analysis