Updated: 14/09/21
Novelties introduced by Law 11/2021, of 9 July, on measures to prevent and combat tax fraud, transposing Council Directive (EU) 2016/1164, of 12 July, laying down rules against tax avoidance practices that directly affect the functioning of the internal market, amending various tax rules and on the regulation of gambling.
Cryptocurrency transactions are not regulated or controlled by any institution and do not require any intermediaries in the transactions. This has made them an ideal instrument for money laundering and hiding income from the tax authorities.
In recent years, the Tax Agency has included in its Annual Tax Control Plans actions aimed at obtaining information and international cooperation on operations carried out with cryptocurrencies. In fact, many taxpayers have seen how the AEAT has included an informative note in the tax data provided for the preparation of their income tax return in which it warns that "according to the data available to the AEAT, you have maintained flows of funds with cryptocurrency operators".
Pending European regulations, LAW 11/2021, OF 9 JULY, ON MEASURES TO PREVENT AND COMBAT TAX FRAUD, introduces two new features: on the one hand, the obligation to report on the holding and operation of cryptocurrencies by intermediaries, custodians or issuers, and on the other hand, the obligation for the holder or authorised person to report on the holding of cryptocurrencies abroad in form 720.
New reporting obligations concerning virtual currencies
With effect from 11 July 2021: Persons and entities resident in Spain and permanent establishments in Spanish territory that provide services to safeguard private cryptographic keys on behalf of third parties, to maintain, store and transfer virtual currencies, will be obliged to provide the Tax Administration, under the terms established in the regulations, with information on all the virtual currencies they hold in custody.
Who is obliged to provide information?
Persons and entities resident in Spain and permanent establishments in Spanish territory which:
- provide exchange services between virtual currencies and legal tender or between different virtual currencies, or otherwise intermediate in the execution of such transactions.
- Provide services to safeguard cryptographic keys on behalf of third parties, to hold, store and transfer virtual currencies.
- Make initial offers of new virtual currencies, in respect of those they deliver in exchange for the contribution of other virtual currencies or legal tender.
What information do they have to transmit to the Tax Agency?
Acquisition, transmission, exchange and transfer transactions involving virtual currencies, as well as collections and payments made in these currencies, in which they intervene or mediate, presenting a nominal list of the parties involved with an indication of their address and tax identification number, class and number of virtual currencies, as well as the price and date of the transaction.
Form 720. Declaration of assets abroad.
The new law equates the holding of cryptocurrencies abroad to current accounts in cash, shares and real estate and obliges Spanish taxpayers holding cryptocurrencies abroad to report their holdings.
Cryptocurrencies held in exchanges in other countries must be declared.
The obligation is for amounts over 10,000 euros.
The obligation does not apply to cryptocurrencies held in personal wallets.
Submission deadline: March 2022 for cryptocurrency securities to be reported as at 31 December 2021.
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