Spain introduces new crypto tax model
The Spanish treasury has introduced a new series of requirements regarding the reporting and taxation of cryptocurrency holdings in the country. The new rules include the obligation of taxpayers to disclose all of their cryptocurrency holdings to the tax authorities, as well as their value in euros, including details of transactions with the addresses of origin and destination.
Spanish Treasury Proposes New Crypto Rules
Spain is sharpening its taxing apparatus when it comes to cryptocurrency holders. The Spanish Treasury has proposed a new set of rules that will apply to cryptocurrency holders and operators, imposing obligations that some consider excessive. The new rules presented by the Ministry of Treasury, which are still being reviewed and will have to be approved, specify that cryptocurrency holders might have to disclose their cryptocurrency holdings and their value in euros.
This is different from what was proposed before, where holders only had to declare the earnings of their trading operations, having no duty of presenting their crypto holdings. These rules will further apply to custody providers and cryptocurrency exchanges that would also have to provide this data to Spanish tax regulators.
Cryptocurrency transactions must also be reported, including the origin and destination addresses, with the type of cryptocurrency and its associated value.
However, the document establishes a minimum amount at which taxpayers would be required to give this data. 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.
Crypto Tax Woes
The Spanish tax authorities are trying to describe a new model in which cryptocurrencies are included after having problems with the legality of Model 720, which had to do with taxing properties and goods held outside of the country by citizens, and was declared in part illegal by the European Union due to the severity of its fines.
With these new definitions, the Spanish authorities are now en route to creating a Model 721 that would define all of the duties for crypto holders inside and outside of the country. The rules, if approved, will be applied starting in 2023, but taking the movements made during 2022 into account.
The Bank of Spain has also been active in registering virtual asset service providers (VASPs) operating in the country. The crypto registry, required to operate in the country, has already onboarded 17 exchanges and custody providers, but some big names in the crypto industry have not registered yet.