Spain Intensifies Control Over Cryptocurrency to Curb Tax Evasion and Settle Debts
Summary:
Spain's Finance Ministry plans to broaden its oversight of cryptocurrency, aiming to seize digital assets to settle tax debts. The law is being reformed, enabling the Spanish Tax Agency to take over crypto assets of taxpayers with overdue debts. This comes alongside plans to counter tax evasion more aggressively, compelling banks and digital money institutions to report all card transactions. Crypto holders in Spain will also need to declare any assets on international platforms to tax authorities. These changes pose regulatory challenges due to their fast-paced implementation.
The Spanish Financial Department is aiming to boost its supervision over cryptocurrency in the country. This strategic move will enable the seizure of digital assets to be used in settling tax debts. The department, under the leadership of María Jesús Montero, is modifying the General Tax Law, particularly Article 162, to authorize the Spanish Tax Agency to locate and assume ownership of cryptocurrency assets owned by debt-laden taxpayers, sources indicate. A royal decree, effective from Feb.1, broadens the spectrum of entities empowered to collect tax. Previously, the mandate was exclusive to banks, savings banks, and credit cooperatives.
Furthermore, the Treasury aims to counter tax evasion more fiercely. It is attempting to oblige banks and electronic money establishments to notify them about all card transactions. The rapid rate of these alterations brings certain regulatory complications. The country is adapting swiftly with several regulations to oversee cryptocurrency.
As reported in October, the Spanish Department of Economy and Digital Transformation stated that the first all-encompassing EU cryptocurrency framework, known as the Markets in Crypto-Assets Regulation (MiCA), will be implemented nationally in December 2025, half a year prior to the official deadline.
Spaniards owning any cryptocurrency on international platforms are required to declare these to the tax authorities before the end of the following month. The application timeframe for Form 721 submission began on Jan.1, 2024, and concludes on the final day in March. All individual and company taxpayers must reveal the sum of funds in their overseas cryptocurrency accounts as of Dec. 31, 2023.
Only those with balance sheets surpassing 50,000 euros (roughly $54,000) in cryptocurrency assets are compelled to reveal their overseas possessions. Asset owners who keep their holdings in self-custodied wallets are required to report these through the regular wealth tax form 714.
Published At
2/5/2024 1:26:56 PM
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