The Spanish National Treasury has introduced a series of new requirements for reporting and taxing cryptocurrency holdings in the country. The new rules include an obligation for taxpayers to disclose to the tax authorities all cryptocurrencies held and their value in euros, including details of transactions with origin and destination addresses.
Spanish Ministry of Finance proposes new crypto rules
Spain seeks to sharpen its taxing apparatus with respect to cryptocurrency holders. The Spanish Ministry of Finance has proposed new rules applicable to cryptocurrency holders and operators, imposing obligations that some consider excessive. The new rules proposed by the Treasury are still under consideration and must be approved, but they specify that cryptocurrency holders may have to disclose their cryptocurrency holdings and their value in euros.
This differs from previous proposals where holders had no obligation to present their crypto holdings and had to declare the proceeds of their trading operations. These rules will further apply to custody providers and cryptocurrency exchanges that must provide this data to the Spanish tax authorities.
Cryptocurrency transactions must be reported along with the type of cryptocurrency and its associated value, including the origin and destination addresses.
However, this document establishes the minimum amount that taxpayers would need to provide this data. Citizens with cryptocurrency holdings of less than €50,000 ($52,854) are not obligated to present this information to the tax authorities.
Crypto Tax Woes
Spanish tax authorities have had problems with the legality of Model 720, which concerns the taxation of property and goods held abroad by citizens and was declared illegal in part by the European Union because of the severity of its fines, and includes cryptocurrencies We are trying to explain the new models.
With these new definitions, Spanish authorities are now going the route of creating Model 721, which will define all obligations for crypto holders inside and outside the country. If approved, these rules will apply starting in 2023, but will need to take into account the moves made during 2022.
The Bank of Spain is also active in registering Virtual Asset Service Providers (VASPs) operating in the country. The crypto registry required to operate in the country already features 17 exchanges and custody providers, but some major players in the crypto industry are not yet registered.
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