As it stands, investors in the cryptocurrency sector who are with the whims and caprices of the Spanish government would be left with no other choice than to declare their crypto holdings. This is owing to the new approval of the bill which mandates reporting of holdings for taxation purposes which took place on Friday, Oct. 19, 2018, and reported by a local news outlet ABC.
Declaration of Crypto Assets
María Jesús Montero, the country’s finance minister, stated in a press conference that this measure is taken in order to make sure that the holders of crypto assets declare such asset accurately, not minding the fact that they are in Spain or in an offshore account. She further stated that the primary aim of this declaration I for tax purpose saying that the government needs to gain “identification of the holders and the balances contributed by these virtual currencies.”
Based on the explanation given by Montero that “It is stated as mandatory that people and companies inform the Tax Agency about this operation,” the report then went further to state that the legislation would include the holder if he is a Spanish resident living abroad.
It is obvious that Spain has been making attempts to formalize the cryptocurrency industry this year, especially in April; where we witnessed the government’s agent sending user identification requests to nothing less than 60 startups involved in the emerging sector.
Crypto tax; European Union Custom
If the latest draft eventually acquires the force of law, it would mean that crypto firms would be accommodated by Spain’s notorious tax reporting scheme popularly known as 720 form. Usually, the penalties which are stipulated to incorrect information about a taxpayer’s earnings are very stringent as it carries a fine of €5,000 ($5,745) for each misrepresentation.
This move would definitely draw attention to the kind of crypto taxation policy prevalent in the European Union. For instance; some member states such as Poland reconsidered its recent imposition of crypto holdings while other member states such as Malta and Spain’s neighbor Portugal operates a crypto-friendly system.