New law from Spain’s regulator

The regulation of cryptocurrency turnover in Spain is gaining more stringent momentum. The authorities are strengthening their position on this industry, and The Tax Administration is moving its own major amendments.

According to the latest innovations in legislation, the government has clearly established that digital assets are taxable. So notifications about this have already been sent to recipient correspondents. The essence of the changes is that all cryptocurrency holders in the country are required to declare their income in the appropriate declarations. If this requirement is not met or if false information is transmitted, violators face a fine of 5 thousand euros or more.

As an explanation, the government clarified that domestic holders of digital assets are not responsible for their transactions to acquire coins, but only for profitable sales. In this case, all citizens must submit information to the tax authorities about all profitable transactions on the sale of tokens for the entire period up to 2020. That is, it does not matter when the asset was acquired, if the Spaniard sold it with an income in 2020, then the holder must declare the capital gain.

The situation is similar with such transactions as: exchanging cryptocurrency for fiat money, converting cryptocurrency to another coin, buying any goods and services for tokens.

General situation with digital money

According to the latest data, more than 100 establishments in Madrid alone accept payments in Bitcoins. In general, there is an increased interest in this particular currency in the country. However, the Spanish regulators themselves say that any such assets are complex and opaque instruments that are characterized by high volatility. That is, they oppose this technology and the use of coins by companies, organizations and citizens themselves. They do not call digital money a means of payment and do not consider it a promising instrument.

To reduce interest in this niche, the authorities even came to ban street advertising of Bitcoin throughout the state. They see it as risky and strictly control the placement of alerts. Thus, the regulator, together with CNMV and other independent experts, have already begun to develop a document on marketing regulation in this area. Also, the Spanish National Commission for the Securities Market intends to tighten control over this digital industry in general, and for this purpose, amendments were made to the tax law.

Features and objectives of the innovation

Among the features of the new tax provisions, it is worth noting that all digital assets are subject to declaration. So holders must enter in the document all information about investments in cryptocurrency that they have in the country and abroad.

The purpose of the law is to collect taxes and discourage any tax evasion. This is how the national authorities declare the fight against fraud and money laundering. The project itself assumes that all investments will fall under the 720 declaration form, which is a strict reporting system focused on foreign investments of the country’s citizens. This is how the government seeks to eliminate the risk of fraud or potential losses from such investments. Earlier, the authorities have already taken tougher measures. According to the amendments, cryptocurrency firms have pledged to register with the Central Bank. This was necessary in order to comply with The fifth EU anti-money laundering directive. Also, it obliges organizations operating with cryptocurrency to identify all their users.

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