Only 5.3% of Spanish crypto-investors were warned to declare income tax, according to a local media report. If true, this means that only 233,000 investors-a minuscule fraction of the estimated 4.4 million Spanish citizens who have delved into the world of cryptocurrencies with investment ideas in mind-have received a warning from the tax agency.
The Spanish tax agency is not vigilant about cryptocurrencies
Only a small fraction of cryptocurrency investors and users in Spain have contacted the national tax agency regarding their crypto transactions over the past year. According to a local media report, the organization managed to send warnings to only 5.3% of the estimated number of Spanish citizens who invested or transacted in cryptocurrency.
This means that only 233,000 investors out of 4.4 million were warned about their obligation to declare cryptocurrencies using income tax and ownership models. While this does not include a significant portion of the total number of investors in the country, it represents a milestone for the agency, which has increased the number of these types of warnings by about 16 times, starting with the 14,800 issued in 2021.
The reasons for this increase have to do with information coming from various sources about cryptocurrency transactions. According to Jesús Gascon, head of the Spanish Tax Agency, there is more information than in other years, due to the growing awareness of Spanish citizens about cryptocurrencies and the various movements of funds related to them.
Spaniards are still unsure
Despite all this, some argue that the average Spaniard who receives one of these warnings does not know how to act to declare cryptocurrency transactions. For this task, the IRS has explicitly created two special sections for declaring cryptocurrency tax income and inheritance.
Enrique Garcia, CEO and co-founder of Taxdown, an online income tax return processor, said:
Many taxpayers don’t know how they’re supposed to report these assets or even whether they’re required to do so or not.
This tax season, only cryptocurrency owners who have bought and sold cryptocurrency assets must submit these records to the tax authority. Users who only bought and held their cryptocurrencies will not have to pay taxes on those assets.
Spain is actively working to legislate the taxation of cryptocurrencies. In March, Spain’s finance minister admitted that cryptocurrencies should not be declared under the 720 model, a designation that refers to funds held abroad. This model was deemed illegal by the EU because of increased penalties, and it had to be changed.
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