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New Spanish tax laws require declaration of crypto assets on non-Spanish platforms

source-logo  cryptopolitan.com 28 November 2023 10:14, UTC

The Spanish Tax Administration Agency, also known as Agencia Tributaria, has introduced new regulations governing the taxation of virtual assets held by Spanish residents on non-Spanish platforms.

Under these new laws, individuals and corporate taxpayers are obligated to declare their crypto holdings abroad by March 31, 2024. This announcement comes as part of Spain’s ongoing efforts to regulate and tax cryptocurrency transactions within its borders.

Declaration deadline set for March 31, 2024

Spanish residents who hold crypto assets on non-Spanish platforms must submit their declarations using the newly introduced Form 721. The submission period for this declaration will begin on January 1, 2024, and conclude on March 31, 2024. Individuals and corporations alike are expected to report the amount of funds stored in their foreign crypto accounts as of December 31, 2023.

While these new regulations encompass all Spanish residents with crypto holdings on non-Spanish platforms, there is a minimum threshold for obligatory declaration. Individuals with crypto assets exceeding the equivalent of 50,000 euros (approximately $55,000) are required to declare their foreign holdings. For those who store their assets in self-custodied wallets, the declaration must be made through the standard wealth tax form, known as Form 714.

The Agencia Tributaria has been ramping up efforts to enforce taxation on local holders of crypto assets. In April 2023, the agency dispatched a staggering 328,000 warning notices to individuals who had failed to pay their taxes on crypto for the 2022 fiscal year.

This represented a 40% increase in the number of notices compared to the previous year when only 150,000 warnings were issued. In stark contrast, just 15,000 notifications were sent out in 2021, highlighting the agency’s commitment to regulating the burgeoning crypto market.

Spain’s proactive approach to crypto regulation

Spain has been taking proactive steps to regulate and govern cryptocurrency. In October, the Spanish Ministry of Economy and Digital Transformation revealed plans to adopt the Markets in Crypto-Assets Regulation, which is the first comprehensive European Union crypto framework. This regulation will come into force at the national level in December 2025, six months before the official EU deadline.

In a further demonstration of Spain’s commitment to regulating the crypto space, the National Securities Market Commission, the principal financial regulator in the country, recently initiated its first case against a technology provider for violating crypto promotion rules. This action underscores the regulatory vigilance that Spain is exercising in its efforts to maintain oversight and ensure compliance within the crypto industry.

As Spain continues to adapt to the evolving landscape of cryptocurrency and blockchain technology, these new tax regulations mark another milestone in the country’s journey towards a more structured and regulated crypto market.

Spanish residents holding crypto assets on non-Spanish platforms should be aware of their obligations and ensure timely compliance with the declaration requirements outlined in Form 721. With the submission period beginning on January 1, 2024, and ending on March 31, 2024, individuals and businesses have a limited window of time to fulfill their tax obligations and avoid potential penalties.

cryptopolitan.com