The Spanish government has approved a bill that will see all crypto holders in the country to disclose their crypto assets holdings. As reported by a local news outlet said this is an anti-fraud law with the purpose of combating tax evasion and ring-fence taxes assets that have been exempted from regulatory oversight.
Disclosure Of Domestic and Overseas Crypto Holdings
The newly approved law by the Spanish government as noted by the minister of finance of the country María Jesús Montero, on the 19th of October is targeted at making the Spanish citizens to identify themselves and their cryptocurrency holdings. The law will also see the citizens holding cryptocurrency investments outside of the country to report their investments to the Spanish authority every year. This is expected to become mandatory for citizens and firms to inform the tax agency about their digital assets.
The bill is already approved by the Spanish council of ministers which is chaired by the Pedro Sanchez, the Prime Minister. Once the bill is passed into law, crypto investments in the country will be subjected to the country’s 720 disclosure form. This is a stringent tax reporting system that targets the overseas investment of Spanish citizens. The model of this places the citizens under the purview of paying €5,000 ($5,740) fine for every form of inaccurate or false information on their earnings.
Cryptocurrency Regulations In Spain
Europe generally has been making efforts to implement appropriate regulations for the cryptocurrency industry in the region; this is quite evident in the effort of the European Union.
However, most of the European countries despite advancement in crypto adoption are still without a clearly defined cryptocurrency regulation. A similar event is evident in Spain.
At the moment in the country, profits amassed from cryptocurrency transactions are taxable under the legislative provision that is related to individual income taxes. Meanwhile, the director general of the country on taxation had stated that transactions involving bitcoin are exempted from value-added taxes, and also cryptocurrency mining is exempted from taxes. The status quo of these is still unclear under the new legislation if it will be subjected to taxation or not.
While the country is aiming at taxing crypto holdings, the Spanish central bank, and the Comisión Nacional del Mercado de Valores, the country’s securities regulator had stated in February that bitcoin and other cryptocurrencies are not legal tenders in the country, while investors were warned to be at risk of fraud or potential loss.