Spain Approves Bill Requiring Disclosure of Cryptocurrency Assets

Spain Approves Bill Requiring Disclosure of Cryptocurrency Assets

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The Spanish government has approved a draft anti-fraud law that, among other things, will require investors in cryptocurrencies such as bitcoin cash to declare all of the assets they hold at home and abroad, according to local media reports. The intention is to ring-fence taxes and prevent tax evasion, particularly on an asset class that until now has appeared to be exempt from regulatory oversight.

Also Read: Genesis Global’s Bitcoin Loans Hit $553m in 6 Months

Citizens to Report Domestic
and Overseas Holdings

María Jesús Montero, the Spanish minister of finance, said on Oct. 19 that under the proposed legislation, Spanish citizens will have to clearly identify themselves and their cryptocurrency holdings. She added that citizens holding digital currency investments outside of the country will also be expected to report their investments to the Spanish authorities every year.

Spain Approves Bill Requiring Disclosure of Crypto Assets
María Jesús Montero

“It is stated as mandatory that people and companies inform the Tax Agency about this operation,” the Madrid-based daily newspaper ABC has quoted Montero as saying.

The Spanish Council of Ministers, which is chaired by Prime Minister Pedro Sánchez, has approved the draft legislation. If the bill is passed into law, cryptocurrency investments will become subject to the country’s 720 disclosure form, a stringent tax reporting system that primarily targets the overseas investments of Spanish citizens. Under this model, taxpayers can face stiff penalties of up to €5,000 ($5,740) for every inaccurate or false detail they report on their earnings, according to Bloomberg.

Cautious on Crypto

Spain Approves Bill Requiring Disclosure of Crypto Assets

The regulation of cryptocurrencies in Spain remains somewhat opaque, which is broadly reflective of wider sentiment throughout the European Union. Profits from cryptocurrency transactions are currently taxable under legislation covering matters related to individual income taxes. However, the country’s General Directorate on Taxation has established that transactions involving bitcoin are exempt from value added taxes. Cryptocurrency mining isn’t taxed either, but it remains unclear whether that might change.

The Spanish central bank and Comisión Nacional del Mercado de Valores, the country’s securities regulator, issued a statement in February stating that bitcoin and other digital coins are not legal tender. They also warned investors against the risk of fraud or potential losses from such investments.

What do you think about the Spanish draft bill on the disclosure of cryptocurrency investments? Let us know in the comments section below.

Images courtesy of Shutterstock.

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