International News

Cryptocurrencies & Tax payments under Spanish Radar

Jose Maria Alfin
October 6, 2023

Spain reinforces the controls over cash payments and cryptocurrencies

Following a European Union Directive, the Spanish Act 11/2021 takes many measures against tax fraud. Some people could not have information about it, but the fines are significant.

What are the obligations arising from that law that could affect my daily routine?

  • Payments in cash are limited to € 1,000 in Spain, provided that one of the counterparts (buyer or seller) has the condition of business or freelance. Payments between individuals that are not acting conducting business activities are limited to € 2,500. Nontax residents in Spain has a different limit consisting of € 10,000. The fines for not complying with this ruling are significant.
  • Form 720 is an informative obligation for Spanish tax residents to report bank accounts (50,000 or more), securities accounts or unit-linked insurances (50,000 or more) or real estate assets      (50,0000 or more) held out of Spain. The consequences for not informing have been significant. If you want more information, you can see my video talking to Mr Alejandro Del Campo on YouTube.
  • Spain’s most important news arising from that law includes the accounts of cryptocurrencies located out of Spain in form 720. Nowadays, almost everybody is talking about cryptocurrencies. Consequently, this obligation impacts many people. Some of them do not follow the legislation news, but they should get advice on how to act and if they are affected by the obligation. The fines are, in my opinion, disproportionate. As discussed with Mr Alejandro Del Campo, the Court of the European Union probably will oblige Spain to amend the law. In the meantime, the people investing in cryptocurrencies should be aware of their declaration since the Spanish tax agency will monitor these assets with special attention.

Notwithstanding, I understand that the countries must have the right to control the capital gains originated by cryptocurrencies. If a country does not have access to that information or enough technical resources to follow these trades, it must use all the available resources to know what is going on. But this legitimate goal is not compatible with the super fines regulated by the law for not reporting or reporting with errors or omissions.

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