Spanish Treasury has brought new requirements to reporting on and taxing cryptocurrency assets in Spain. New rules require all taxpayers, regardless of cryptocurrency ownership, to declare their crypto holdings and their euros value to tax authorities. This includes details of transactions along with addresses of destination and origin.
Spanish Treasury proposes new crypto rules
Spain has increased its taxes on cryptocurrency owners. Spanish Treasury proposed new rules to be applied to crypto operators and cryptocurrency holders. These obligations are deemed excessive by some. The Ministry of Treasury has presented new guidelines that could require cryptocurrency owners to reveal their crypto holdings, as well their values in euros. These rules are still under review and need to be approved.
This is a change from the old proposal where only holders had to report their trading earnings. They were not required to disclose their crypto holdings. The Spanish tax authorities will require that cryptocurrency exchanges as well as custody providers comply with these rules.
Also, cryptocurrency transactions should be reported. These must include the source and destination addresses along with the type of cryptocurrency as well.
The document does however specify a threshold at which taxpayers must provide this information. If the cryptocurrency holdings of the citizen are under the value of €50,000 ($52,854), there will be no duty of presenting this information to the tax authorities.
The Cryptotax Woes
After having issues with Model 720’s legality, the Spanish tax authorities have created a model that includes cryptocurrencies. This was to address the taxation of goods and properties held in Spain by citizens. It was also illegal under the European Union because of its severe penalties.
These new definitions have led to the Spanish authorities creating Model 721, which would outline all the duties of cryptocurrency holders both within and outside Spain. These rules, if they are approved by the Spanish authorities, will take into account all movements occurring between 2022 and 2023.
Virtual asset service providers (VASPs), which are licensed in Spain, have been registered by the Bank of Spain. Although 17 crypto exchanges have been added to the registry and custodian providers are now operational in the country’s crypto market, some major names from the industry still need registration.
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