Spain strengthens fiscal control over bitcoin (BTC) and cryptocurrencies through the reform of the Draft Law on Prevention and Fight against Tax Fraud that has been under analysis since 2020. This regulation obliges to declare the holding of cryptocurrencies, both those that are in wallets, and in Spanish or foreign custody platforms.
This guideline was included in the provision approved on June 30 by the Congress of Deputies of that nation, as reported by Radio Televisión Española (RTVE). This legislation establishes that transactions with cryptocurrencies must be included in the declaration of assets abroad, based on Model 720.
Model 720 refers to the declaration on assets and rights located abroad, which is considered a tax obligation of an informative nature. This tax return must be submitted by persons or entities resident in Spain. However, the Model is being evaluated by European Justice, for the opinion made by the European Commission based in Brussels, in which it questions its application, specifically for the establishment of high fines.
Penalties for not properly declaring bitcoin holdings
According to a local media, penalties would be established in case of not complying with reports on cryptocurrency holdings. Fines could be 5,000 euros for each data not included, or containing incomplete, erroneous or false information.
There would also be a fine of 100 euros for each data on cryptocurrencies submitted outside the corresponding term.
The use of cash has limits
In addition to what has been mentioned so far, the act contains other changes concerning the limitation of cash payments for certain economic operations involving an entrepreneur or a professional, to 1,000 euros, when previously it was 2,500 euros.
In the same way, reduces the cash payment limit from 15,000 to 10,000 euros in the case of those Spanish citizens living abroad.
The limit on cash payments has gone against the European Central Bank (ECB) approach. The issuing body rejected this initiative on February 1, 2019. Former ECB President Mario Draghi, he asked the Spanish Government to stop the measure and warned of serious risks for the European currency and certain economic sectors of the country.
Thus, Spain joins a global movement to reduce or completely eliminate the use of cash. Through the mandatory use of digital payment systems, the State can track citizens ‘ transactions. As reported by Crypto News, many people in the world consider this to be a violation of people’s right to privacy.
CNMV and ECB would control cryptocurrencies in Spain
News on cryptocurrency regulation in Europe are frequent. For example, this medium reported last month that, in compliance with European Union standards, cryptoassets in Spain will be under the orbit of the National Securities Market Commission (CNMV) and the Bank of Spain.
On that occasion, it was also mentioned that, according to new provisions, platforms that provide services with digital assets in that continent, must have their headquarters in a country that belongs to the European Union.