Spain Approves Anti-Tax Fraud Law Demanding Disclosure of Crypto Holdings

Spain’s legislature has passed an anti-fraud law that mandates the disclosure of cryptocurrencies held abroad, according to local reports. However, the EU is expected to present its resolution on the issue on July 14th, which could challenge the new law’s implementation. Congress approved the draft law on Prevention and Fight Against Tax Fraud on Thursday afternoon. Promoted by the Minister of Finance, María Jesús Montero, the law requires its citizens to report on virtual currencies held abroad. The controversial Model 720, according to which citizens can be fined up to 150%, has been facing criticism in the EU for implementing it back in 2015. In the event of non-compliance with the obligation, the sanction will consist of a fixed fine of 5,000 euros for each set of data referring to each virtual currency individually considered according to its class that should have been included. If the disclosure is provided incompletely or inaccurately, the fine will be a minimum of 10,000 euros. When it comes to reporting after the deadline without the prior requirement from the Tax Administration, the penalty will be a minimum of 1,500 euros. Even those who make the declaration by means other than electronic, computerized, and telematic will be sanctioned when there is an obligation to do so by said means. Additionally, the bill limits payments in cash to 1,000 euros from 2,500 euros, a measure previously rejected by the European Central Bank (ECB) in Feb. 2019. The cash payment limit is also lowered from 15,000 to 10,000 euros in the case of individuals with tax domiciles outside of Spain.