The Spanish Treasury has recently introduced a new set of rules that apply to cryptocurrency operators and holders. These proposed rules — which some believe to be excessively strict — are still being reviewed before they could be approved.
The new rules state that crypto holders might need to declare their cryptocurrency holdings and their value in Euros to Spanish tax regulators, which differs from the previously proposed rules where holders were not required to disclose their crypto holdings but only their earnings from trading operations. The new rules will apply to custodians and crypto exchanges as well.
Crypto-related transactions — including the cryptocurrency type, value, destination and origin addresses — must also be reported. However, this particular rule only applies to taxpayers holding cryptocurrencies that are at least €50,000 in value.
Previously, the European Union has declared Model 720 to be in part illegal as its fines are considered to be excessively severe. For this reason, the Spanish tax authorities have decided to describe a new model — and this time, cryptocurrencies are included. The proposed Model 721 will be defining all of the duties that crypto holders inside and outside of Spain have to abide to.
If the rules are approved, it will be in effect from 2023 onwards.