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Spanish Ministry of Finance Takes Aim at Cryptocurrency Tax Evasion with New Powers

The Spanish Ministry of Finance, under the leadership of María Jesús Montero, is actively pursuing reforms to enhance its control and oversight of cryptocurrencies within the country.

Their primary objective is to enable the seizure of digital assets as a means to settle outstanding tax debts.

To achieve this goal, the ministry is currently working on legislative amendments to Article 162 of the General Tax Law.

These proposed changes will empower the Spanish Tax Agency to identify and confiscate cryptocurrency assets owned by individuals or entities who have delinquent tax obligations.

One significant development in this regard is the recent implementation of a royal decree, effective from February 1st.

This decree broadens the scope of entities with tax collection authority.

Previously, only banks, savings banks, and credit cooperatives were authorized to report to the Treasury.

This expansion allows the Treasury to strengthen its efforts in pursuing tax evaders and recover unpaid taxes more aggressively.

Furthermore, the Treasury intends to impose stricter reporting requirements on financial institutions, including banks and electronic money institutions.

They will be required to provide detailed information on all card transactions, making it harder for individuals to evade taxes through undisclosed financial activities.

The rapid pace of these regulatory changes reflects Spain’s proactive stance in establishing a comprehensive framework for cryptocurrency governance.

In October 2023, the Spanish Ministry of Economy and Digital Transformation announced plans to adopt the Markets in Crypto-Assets Regulation (MiCA), the first comprehensive European Union crypto framework.

READ MORE: Bitcoin Predicted to Reach New All-Time Highs in 2024 Despite Halving Challenges

This regulation is set to be implemented nationally by December 2025, six months ahead of the official deadline.

Spanish residents who hold cryptocurrency assets on foreign platforms have until the end of the next month to declare them to the tax authorities.

The declaration period began on January 1, 2024, and will conclude on the last day of March.

Individuals and corporations are required to disclose the value of funds held in their foreign crypto accounts as of December 31, 2023.

It’s worth noting that only individuals with crypto assets exceeding the equivalent of 50,000 euros (approximately $54,000) are obligated to declare their foreign holdings.

Those who store their assets in self-custodied wallets must report their holdings using the standard wealth tax Form 714.

These measures underscore Spain’s commitment to ensuring tax compliance and transparency in the rapidly evolving world of cryptocurrencies.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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