Spanish Tax Authority is desirous of collecting tax against crypto trading this year as the last date of returns commencing returns filing is nearing. Any taxpayer who had sold digital assets in the fiscal year and generated revenues against the sale will be liable to pay taxes at a certain percentage. Failure to pay taxes will force the authority to take legal actions warranted under the law. But the taxpayers are confused about how this task will be done without mistakes.
The end date which will, later on, commence the tax returns filing date is about to reach Spain. Before even the commencement of the returns season, the Spanish Government had said that it will be collecting tax over crypto trading. Thereafter, the Government incorporated various amendments in the tax laws for taxing crypto trading. Under this tax net, the Government told that both, the traders as well as the crypto exchanges will be included.
In the pursuit of its initiative of taxing crypto, the Government has obtained data of taxpayers who have traded cryptocurrencies last year. For instance, it is in the knowledge of the Government that there are approximately 7.5 million individuals who have traded cryptocurrencies. Out of these 7.5 million persons, about 60% are those who have traded crypto for the purposes of investment.
As per the prevailing crypto tax law in Spain, any person selling or disposing of digital assets is required to inform the tax authority. Any revenue collected through the sale of digital assets or through their trading and investment would also be apprised to the tax authority. If anyone found not disclosing the actual revenue collected, the authority is empowered to impose hefty fines upon such defaulting taxpayers. In addition, initiation of legal proceedings along with drastic measures such as imprisonment can also be enforced.
This is going to be the first fiscal year where Spain will be collecting taxes under the crypto head. Earlier neither there was any tax imposed upon crypto trading nor anyone was required to inform the authority about any sale/purchase. The tax authority is committed to mitigating the chances of anyone deliberately avoiding tax under crypto.
Even crypto exchanges have been informed to keep informing their clients to file accurate returns and include crypto transactions. Even if customers of the exchanges do not comply, then exchanges have been asked to take action against such customers.
Although most of the taxpayers are willing to pay the taxes and file returns on time. However, a large number of taxpayers have complained of facing difficulties in compiling their returns. It is expected that because the crypto tax net is new, therefore, there will be a lot of discrepancies in the returns. In such a situation, the authority would ask the taxpayers to pay fines. Even though public awareness campaigns were also initiated but they failed to achieve the desired results.