Spanish Treasury to hold crypto to pay tax debts

Spain's finance ministry is looking to rein in cryptocurrencies in the country to hold digital assets to settle tax debts.

The ministry, led by María Jesus Montero, is preparing legal amendments to the general tax code, specifically Article 162, which will allow the Spanish tax agency to identify and seize crypto assets held by taxpayers with past due debts.

The royal decree, which took effect on February 1, expands the number of entities empowered to collect taxes. Until now, only banks, savings banks and credit unions could report to the Treasury.

Related: Spanish citizens to declare foreign crypto holdings by end of March 2024

The Treasury Department plans to fight tax evasion more aggressively. It is seeking to force banks and electronic money institutions to report on all card transactions.

The speed with which the changes are being implemented poses some challenges on the regulatory front. The country is actively trying to move with different regulations to manage crypto.

In October 2023, the Spanish Ministry of Economy and Digital Transformation reported that the first comprehensive EU crypto framework, the Markets in Crypto-assets Regulation (MCA), will be implemented nationwide in December 2025, which is six months before the official deadline.

Related: Survey: 65% of Spaniards are not interested in using the digital euro

Spanish residents who hold any crypto assets on non-Spanish platforms must notify the tax authorities by the end of next month.

The filing period for the Form 721 statement began on January 1, 2024 and ends on the last day of March. Individual and corporate taxpayers will have to declare the amount of money stored in their crypto accounts abroad from December 31, 2023.

However, individuals with balances in crypto assets greater than 50,000 euros (around $54,000) are required to declare their foreign holdings. Individuals who store their possessions in self-contained wallets must report their holdings via regular Wealth Tax Form 714.

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