Tremble in fear, Spanish cryptocurrency holders, the taxman is coming to you. A recent report by ABC Economia indicates that authorities in the country are going to be clamping down on residents with crypto holdings.
Currently, any profit derived from a cryptocurrency transaction is subject to income tax laws – although transactions made with Bitcoin specifically are exempt from value-added tax.
Regulators have now put forward a draft-law, which the government approved last Friday, that will force cryptocurrency holders to identify themselves. They will also have to state how much cryptocurrency they have in their possession.
“It is stated as mandatory,” said Minister of Finance, María Jesús Montero, “that people and companies inform the Tax Agency about this.”
Spaniards with cryptocurrency abroad must also report any bitcoin they hold in offshore accounts under the ‘720 declaration.’ Introduced in 2012, this law requires Spanish residents to inform tax authorities of specific assets that they hold abroad.
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Fortunately for most crypto fans, this law is unlikely to apply to them. Only people with certain assets valued at over €50,000 ($57,000) have to fill in a 720 declaration form.
Cryptocurrency in Spain
Despite these new rules, Spain has been fairly friendly towards cryptocurrency holders in the past twelve months. In February, the country’s regulator, the Comisión Nacional del Mercado de Valores, along with its central bank, Banco de España, issued a joint statement saying that cryptocurrencies are not legal tender and, as a result, are not subject to traditional financial regulation.
In the same month, reports suggested that the government was preparing regulation to attract cryptocurrency firms to Spain.
“The level of the digitalization for companies will be key,” Garcia Egea, a member of the ruling Popular Party, told Bloomberg earlier this year. “We hope to get the legislation ready this year. We want to set up Europe’s safest framework to invest in ICOs.”
Egea hinted at what rules that legislation might contain, mentioning tax breaks for blockchain firms working on big data and 3D printing during his interview with Bloomberg. But as of yet – with the exception of the recent tax laws – we are yet to see these new laws materialise.