The Spanish bill will force to report the cryptocurrencies stored on exchanges outside the European country. There is an expectation that the Spanish Parliament will discuss and approve the bill.
Holders of Bitcoin and other cryptocurrencies would have to pay a minimum of around EUR 10,000 if they do not report their holdings abroad to the Spanish tax administration. This provision establishes the draft “Law on prevention and fight against tax fraud”, which the Government of Spain approved.
This future legislation will have some implications for the members of the cryptocurrency ecosystem in the Iberian country. Attorneys Javier Maestre and David Maeztu, jointly with tax economist José Antonio Bravo, clarify some ideas and share the document on Twitter. They do this while the bill is under discussion in Parliament.
Javier Maestre talks about the requirements that those who own cryptocurrencies outside of Spain must meet. He particularly mentions the sanctions on individuals who do not report their holdings in Bitcoin.
The document does not make clear the difference between “data” or “data set”, nor does it explain how they will help to establish the amount of the fines. However, the measure will force those who store their money outside Spain to declare their holdings to the tax administration.
In this sense, the bill proposes that individuals must “report virtual currencies located abroad of which they are the owner, or those of which they are the beneficiary or authorized entity.”
People “will only have to say whether they have cryptocurrencies abroad,” says Maestre. Technology law expert David Maeztu clarifies doubts about the term “located abroad” that appears in the document. In this regard, he explains that these are the cryptocurrencies that they have on exchanges or service providers outside of Spain. However, he clarifies that “they should not declare those that are in cold wallets or similar storage systems.”
Those who safeguard their virtual assets in Spain, including cryptocurrency exchange and custody companies, must also “deliver information to the tax administration.” That will require exchanges to provide data on the balances of the holders that they serve.
Besides, they must provide information about any acquisition, transmission, exchange, transfer, collection, and payment with Bitcoin. This implies indicating the type and number of cryptocurrencies included in the transactions, the price and date of the operations, and the personal data of the operators (name, address, and tax identification number).
Companies that conduct initial coin offerings (ICOs) will also be among those who must comply with those measures. For this reason, projects aimed to launch tokens must report to the State the process of selling the new assets in exchange for other cryptocurrencies or fiat currencies.
The explanatory statement that appears in the bill indicates that the Spanish government seeks to reinforce tax control over “taxable events related to virtual currencies.” They have been considering that objective for two years when a bill on the tax statement of cryptocurrency operations received their approval.
José Antonio says that the government maintains the idea of forcing cryptocurrency exchanges and custodians to report the balances in each virtual currency. Likewise, they seek to identify both those who conduct the operations and those who acquire new cryptocurrencies.
However, the bill establishes that there would be a report if the movements exceeded EUR 3,000. The same would apply to the obligation to declare only if the balance in cryptocurrencies exceeded EUR 50,000.
By Alexander Salazar
