Spanish crypto holders will be “burdened” with fresh crypto declaration rules

Insiders in the crypto industry have hit back at the Spanish government’s latest plans for the sector: A new effort to get residents holding coins on foreign platforms to declare their holdings.

As previously reported, an attempt to force Spaniards with coins on foreign exchanges or in foreign wallets to declare their holdings in “chaos” earlier this year failed. The Treasury and Tributary Agency (Spain’s tax body) was forced to abandon plans to get residents to list their cryptocurrencies on the much-maligned Modelo 720 form. The latter is a declaration of taxable assets, such as shares and real estate, held outside Spanish territory.

But clerical errors seem to have derailed these plans, and the Treasury decided at the last minute to let crypto holders get off the hook. However, it seems that the Treasury and the tax authorities are now ready to try again – and have rolled out proposals for a new document that they will call Modelo 721.

This new document will, unlike its predecessor, have a designated field for cryptocurrencies entitled “virtual currencies located abroad.” The tax body’s proposal also proposes to write crypto declaration obligations into the country’s tax code.

If the proposal is accepted by the government, declarations for coins held during 2022 must be made “between January 1 and March 31, 2023.”

Commentators, however, have agreed that the proposal has been processed with problems.

Potential errors include the fact that customers will be required to find out even if the crypto platforms they use are actually based abroad or not.

Many crypto-trading platforms claim to be completely decentralized, which means (at least in theory) that they are neither “domestic” nor “foreign” from a Spanish customer’s perspective. To increase the confusion, Finanzas reported, that many platforms are registered with the exchange Bank of Spain, but is actually headquartered outside the country. The “burden” of deciding exactly where a crypto company is based will fall on individual citizens, the report continued.

While larger Spanish stock exchanges like Cryptan and Bit2Me is headquartered in Spain, this is not the case with smaller domestic platforms, some of which are officially outside Spain.

Javier Castro-Acuña, Head of business on the Valencia-based trading platform Bitnovosaid that the new form “demonstrates a lack of knowledge about [crypto] sector from those who wrote it. “

Castro-Acuña added that the form was also a “disproportionate” measure that would ultimately have “very little significance” for most crypto owners.
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Learn more:
– The Spanish government wants crypto holders to report transactions and holdings from 2023
– Spain’s Basque Country prepares its own crypto tax laws, stock exchanges to be forced to report on clients

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