In Spain, to comply with the requirements of the State, savers of bitcoin (BTC) and other cryptocurrencies must declare their holdings to the Ministry of Finance. Recently, this entity has asked several individuals to detail their possession of crypto assets during the last four years.
According to what the media reports The Objective, the information request applies to selected taxpayers, not all. In the declaration, these people are asked to clarify what balance of crypto assets they have had in their assets from 2017 to date during each year.
To learn more about the subject, CriptoNoticias contacted the tax economist Jose Antonio Bravo Mateu, who explained that the collection powers of the Wealth Tax, which is levied on property and rights, are assigned in Spain to the autonomous communities. “In this tax, it is essential to know the assets that the taxpayer owns, and among them are cryptocurrencies.”
This requirement of the Spanish government is given after the approval of the Law on Prevention and Fight against Tax Fraud this year, a fact reported by CriptoNoticias. However, it should be noted that a form for taxpayers to declare their ownership of digital assets through form 720 has not yet been regulated, explains the aforementioned media.
In the words of the specialist consulted, “both the State Tax Agency and the autonomous tax entities can request the taxpayer to facilitate their position in cryptocurrencies as of December 31, as it is information of tax significance, regardless of whether or not the taxpayer had to do this. statement”.
How does the Treasury know if you have bitcoin?
This tax return is mandatory and is equivalent to declaring any other asset, but How can the government know if someone owns cryptocurrencies?
Bravo Mateu answered this question by stating, first, that he does not believe “that there are special criteria” for the selection of taxpayers from whom information is requested. However, he did clarify that the Treasury may know by bank details who have transferred funds to and from exchanges.
Finally, Jesús Lázaro, a lawyer for a firm specialized in legal consulting on crypto assets consulted by the aforementioned media, details that those who maintain their position in the same cryptocurrency – for example, bitcoin – for several years, that is, holders are exempt from this declaration. This implies that the mandatory nature of the declaration mainly targets those people who have generated profits through cryptocurrency trading.
What taxes do cryptocurrencies pay in Spain?
Once the assets in cryptocurrencies have been declared, it is time to determine how much the taxpayer will have to pay for the wealth tax. In addition to Spain, this tax is levied in few countries in Europe, including Norway, Switzerland and Liechtenstein.
This taxation is done by tranches, according to the balance in crypto assets of each person, provided that the taxable minimum of € 700,000 is exceeded, counting all assets, as detailed in the portal Newtral. For those who have assets of 6,000 euros or less, the tax is 19%; up to 44,000, 21% is charged; the next ranking is 23% up to 150,000 euros; finally, the last one is 26% for those who have more than 200,000 euros in crypto assets.