Spain approves law requiring disclosure of information about digital assets

According to local media, the Spanish Council of Ministers has approved an anti-fraud bill, according to which citizens undertake to declare every year the digital assets they own in the country and abroad. Thus, the regulator intends to prevent tax evasion in relation to cryptocurrencies that were not previously subject to regulation.

Spanish Finance Minister Maria Jesús Montero said on October 19 that if the law is adopted, investments in cryptocurrency will need to be declared under Resolution 720 of the country's tax reporting system, which includes foreign investments. Failure to comply with this requirement will subject taxpayers to fines of up to €5,000 for each instance of inaccurate or false reporting of their income.

Cryptocurrency regulation in Spain remains uncertain, broadly reflecting the broader mood across Europe union. 

Profits from cryptocurrency transactions are currently subject to individual income taxes. Transactions with digital currencies are not subject to value added tax.

In mid-2016, the Spanish authorities obliged mining companies and individuals involved in mining to register as individual entrepreneurs and also pay tax on profits from cryptocurrency mining, recognizing this type of activity as economic. This rule of law was repealed in 2017.

Currently, cryptocurrency mining is not subject to tax, but it is not clear whether this rule will apply in the future.

The Central Bank and the Securities Commission Spain said in February that Bitcoin and other digital currencies are not legal tender. They also warned investors about the dangers of fraud and potential losses associated with such investments.