Spanish Treasury Requires Investors to Declare Holdings in Cryptos

• The new provisions of the Ministry of Finance of Spain that users must provide information about the assets they own in bitcoin and other cryptocurrencies
• Several taxpayers have already received requests from the government requesting information on their assets.
• Digital assets are taxed by the wealth tax from a minimum rate of 19%.

Investors and other users of bitcoin and other cryptocurrencies in Spain are required to declare their possessions to the Ministry of Finance. This is how the laws of this country that have been regulating the sale and storage of crypto assets turned out.

The tax authorities have begun to request the delivery of detailed information on the cryptocurrencies in the possession of the public during the last four fiscal years, as reported by the Spanish website The Objective.

The government agency has already begun to send taxpayers in the letters that request to be sent this information regarding the fiscal years since 2017, although it has not yet submitted a form that includes this information in the annual income statement.

So far the letters have been sent only to a few contributors. To those who have been required to send information, they must declare the balances in cryptocurrencies of the last four years, specifying the annual amount.

On the Flipside

• The Wealth Tax, which is levied on property and rights, is a tax jurisdiction of the autonomous communities. It allows to know the amount of assets that the taxpayer owns, including cryptocurrencies.

The new rule of the Spanish government is derived from the Law of Prevention and Fight against Tax Fraud approved this year.

According to the lawyer specialized in Crypto Legal Consulting, Jesús Lázaro, the delivery of information to the Spanish Treasury is mandatory.

In view of the difficulties of the Spanish authorities in accessing this type of information, certain taxpayers are being forced to declare it.

"The Treasury is putting all the pressure on the taxpayer, because it does not have any information about cryptos," says Cárdenas.

"The only information it has is the income that is made from the bank to the exchanges," adds the expert.

The state Tax Agency and the regional tax bodies have the legal power to demand this information. It is sensitive and important information for the Spanish treasury that must be delivered, regardless of whether the taxpayer has to declare it or not.

Why are certain taxpayers investigated? Requests for information on digital assets in Spain are intended to collect information on the amount of cryptocurrencies in possession of users. But at the same time it seeks to exert greater control over the crypto market.

In order to document investigations of certain cybercrimes such as money laundering, authorities need to gather enough information to document each case. Otherwise, some open court cases may lapse.

Although the Spanish tax authorities can determine the financial movements of people and companies from the bank data they handle. This way they know how much exchange operating companies have been paid.

Why You Should Care

• In Europe there are several countries where the tax on cryptocurrencies is paid. In addition to Spain are Switzerland, Norway and Liechtenstein.

The taxation of cryptocurrency assets in Spain is progressive with a taxable minimum of 700,000 euros. Those who own crypto assets for € 6,000 euros or less, must pay a tax of 19%.

Then for the next € 44,000, 21% must be paid and taxpayers with assets worth up to € 150,000 pay 23%. Finally, those who own more than € 200,000 in cryptocurrencies pay 26%.

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