New Powers to the Spanish Tax Authority
In a bold move to tighten tax control over digital assets, the Spanish Ministry of Finance is set to propose a tax reform. This reform intends to bestow the agency with the authority to seize cryptocurrencies and non-fungible tokens (NFTs) in instances of tax delinquency. The source of this update, El Economista, highlights that the reform targets Article 162 of the General Tax Law, aiming to strengthen the government’s hand in claiming unpaid taxes through crypto assets.
Amendments and Embargoes
The Ministry’s reform agenda includes amendments to the General Collection Regulations. These modifications are designed to facilitate the embargo of digital currencies as a debt recovery measure. Notably, Spain’s tax administrators are not in the dark regarding crypto possessions; they have been keeping tabs on taxpayers’ holdings, particularly those stored overseas. Starting this year, Spanish taxpayers are required to report these assets.
Comprehensive Tax Controls and Declarations
Spain is at the forefront in Europe, establishing stringent tax controls on cryptocurrency transactions. Crypto gains or losses must be reported in personal income tax filings. Additionally, crypto assets are subject to wealth tax declarations if they surpass €50,000. Form 714 has been designated for individuals with self-custodial wallets, such as MetaMask or Ledger, to declare their holdings.
A Surge in Compliance Warnings
In 2023, Spain’s tax regulator took a proactive stance by issuing over 325,000 warnings to residents who neglected to declare their cryptocurrency holdings. This figure marked a substantial increase from the 150,000 warnings sent out in 2022, signaling a growing emphasis on compliance enforcement in the crypto space.
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