The Spanish government has approved a draft bill that will require crypto holders residing in the country to disclose how much cryptocurrencies they possess.
24 October 2018 | AtoZMarkets - Cryptocurrency holders in Spain are now trembling in fear as the nation's government has approved a draft bill that could force digital currency holders to reveal themselves and declare the amount of cryptocurrency they possess.
Will Spaniards Soon Have to Report Their Cryptocurrency Portfolio?
According to a recent report from ABC Economía, the country’s finance minister, María Jesús Montero said last week, that the draft bill, as approved by the Spanish Council of Ministers, was designed to make residents of Spain that holds cryptocurrencies to disclose themselves to tax authorities. The Minister was quoted as saying:
“It is stated as mandatory that people and companies inform the Tax Agency about this.”
Whilst currently the transactions of Bitcoin have been specifically exempted from the tax filing process, Spaniards could be required to report and pay income tax on all the profits derived from digital asset transactions if the bill will pass.
The draft bill will also mandate Spanish residents with cryptocurrency stored abroad to report their offshore investments to the Spanish regulator every year. In accordance with the 720 declaration form introduced in 2012, it becomes necessary for residents to inform tax authorities about the specific amount of digital currencies they possess in other countries.
However, this law does not apply to every crypto holder. According to the report, only residents with certain assets valued at over $57,000 are mandated to fill the 720 disclosure form. Therefore, taxpayers who falsify their earnings may receive stiff penalties of up to $5,745 for every inaccurate detail they report.
Spain Formalizes the Cryptocurrency Industry
Despite this draft bill, Spain has been well-disposed towards crypto holders in the past year. Back in February, a joint statement was issued by the country’s regulatory watchdog, the Comisión Nacional del Mercado de Valores (CNMV), along with its central bank, Banco de España (BCE), saying that cryptocurrency is not a legal tender. Hence, it is not subject to traditional financial regulation.
Also, reports indicated in the same month, that the government was making preparations to regulate the crypto markets so as to attract cryptocurrency firms to Spain. Garcia Egea, a member of the ruling Popular Party said in an interview:
"The level of the digitalization for companies will be key. We hope to get the legislation ready this year. We want to set up Europe’s safest framework to invest in ICOs.”
They did just so! AtoZMarkets reported back in June, that the Spanish Congress had approved crypto regulations. The congressional hearing resulted in a decision to regulate blockchain technology and cryptocurrencies in the country as a cost-efficient system for payments and transfers. Whilst later in the year, AtoZMarkets also reported that the Spanish Banco Bilbao Vizcaya Argentaria (BBVA) became the first world bank to issue a loan using blockchain technology.
Is the Spanish government setting a good example for other jurisdictions? Let us know in the comments section below.