The Spanish government has reportedly approved a draft law that will make it mandatory for digital asset holders with over €50,000 ($57,000) in their cryptocurrency wallets to identify themselves and announce their exact holdings. This new rule is targeted at curbing cryptocurrency tax evasion, according to a Finance Magnates report on October 24, 2018.
Spanish Regulators Hit Crypto Big Whales Hard
Per sources close to the matter, it will no longer be business as usual for cryptocurrency investors in Spain.
Authorities have approved a draft law focused on making it compulsory for holders of at least $57,000 to identify themselves and state the exact value of blockchain-based virtual currencies under their possession to enable the tax authorities to do better administer relevant regulations.
“It is stated as mandatory that people and companies inform the Tax Agency about this,” said Minister of Finance, Maria Montero. Similar to the United States, profit gotten from cryptocurrency transactions is subject to income tax laws, but unlike in the U.S., bitcoin transactions do not attract a value-added tax.
Cryptos Held in Foreign Cryptocurrency Exchanges Must Be Declared
With the latest development, Spanish citizens with digital assets in offshore accounts must also declare their entire holdings, in line with the nation’s 720 declaration of 2012, which mandates all Spanish residents to inform the tax department about specific assets held abroad.
Importantly, the new regulation will not apply to cryptocurrency investors whose digital assets are less than $57,000, as such it’s most likely that only those holders whose crypto holdings fall within that bracket will be eligible to fill the 720 form.
Despite the new rules, it is worth noting that Spain remains a relatively crypto-friendly region though not as liberal as Malta, which is fast becoming a significant distributed ledger technology (DLT) and cryptocurrency hub in Europe.
As reported by BTCManager in February 2018, Spanish lawmaker Teodoro Garcia Egea, who’s also a member of the ruling People’s Party hinted he would draft a bill and implement a law targeted at fostering flexible taxation that would lure blockchain-based startups to the region.
In related news, on October 24, 2018, BTCManager informed that Barcelona has announced the move to launch a native DLT-based virtual currency to boost commercial activity in Spain.