Spanish tax authorities have included cryptocurrencies as part of their new guidelines for this tax collection season. Aside from strengthening channels for voluntary tax applications, the agency will also step up its investigation of cryptocurrencies in digital payments, including the possibility of seizing cryptocurrencies associated with tax obligations and criminal activity.
Spanish Tax Agency to Increase Monitoring of Crypto Tax
The Spanish Tax Agency is preparing its crypto strategy for the upcoming tax collection season: on February 27, the agencyrevealedseveral guidelines to enhance the collection of taxes related to the use of cryptocurrencies in digital payments and also to curb criminal activity.
In the document, the agency declared that it “underscores the collection area’s intent to promote action to find crypto assets subject to seizure this year.” This could mean that tax debtors will be tracked down and cryptocurrency seized to modify the debt. However, the document does not provide details on how the agency intends to do this or the tools it will use for this purpose.
Similarly, the agency indicates that it will develop “a research plan related to the use of cryptocurrencies in the field of the digital economy in order to detect assets whose origin may be related to criminal activity.”
Crypto in the Cross
These new developments are aimed at making the Spanish tax authorities more vigilant against crypto assets and increasing collection.
Other tax authorities around the world are also including digital wallets and cryptocurrencies as an important part of their investigation and seizure processes. For example, Argentina’s tax authorities will be able to confiscate funds from digital wallets after February 2022, and the agency has included this type of structure, which is very popular in Argentina, as part of the assets subject to seizure.
However, Spanish tax authorities have not historically been so successful in targeting growing cryptocurrency investors. Reportedly, they have only managed to warn 5.3% of the country’s cryptocurrency investors of their crypto tax liability in 2022.
This means that more than 4 million cryptocurrency investors were not contacted by the agency regarding their cryptocurrency tax obligations. According to local analysts, some of these crypto holders do not even know that they have to declare these assets.
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