A local newspaper reported that only 5.3% Spanish crypto investors received an alert to report income taxes. This would indicate that just 233,000 crypto investors in Spain, which is a small percentage of approximately 4.4 million Spanish citizens who have ventured into the world of cryptocurrency with an investment idea in mind, received a warning from the tax agency.
Spanish Tax Agency Flattens on Crypto Vigilance
In Spain, only a few crypto investors and users were contacted last year by the tax agency regarding their cryptocurrency operations. Local media reported that the agency sent warnings to just 5.3% of Spanish citizens who had made cryptocurrency-related transactions or invested.
Only 233,000 of the 4.4 million investors have received warnings about their obligation to declare cryptocurrencies under income tax or holdings models. Although this does not include all the investors, it is still a milestone for the government, as the warning has been increased 16 times to 14,800 in 2021.
These are the results of information from various sources regarding cryptocurrency transactions. According to Jesús Gascón, head of the Spanish Tax agency, there is more information than compared to other years, due to the increase in the awareness that Spanish citizens have of cryptocurrencies and the different movements of funds related to these.
Spain’s Uncertainty
Despite all this, many believe that the average Spanish citizen who receives one of these alerts doesn’t know how to properly declare crypto operations. The tax agency created separate sections for declaring cryptocurrency heritage and tax income.
Enrique Garcia (CEO and co-founder) of Taxdown declared that he was proud to have made this statement. Taxdown processes income tax statements online.
Many taxpayers are not aware of the requirements for presenting these assets, or whether they are required to.
Only cryptocurrency owners who have bought and sold crypto assets during tax season need to provide these records to the IRS. Users that have only purchased and held their cryptocurrencies won’t have to pay taxes on the assets.
Spain has been very busy in implementing legislation to tax cryptocurrencies. Model 720 is a classification that refers to foreign funds and should be avoided. In March, the Spanish Treasury minister admitted that cryptocurrencies could not be declared. The EU declared this model illegal due to its high penalties. It had to be modified.
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