Spanish Treasury Seizing Crypto for Tax Debt

Spanish Treasury aims to enhance control over cryptocurrency monitoring and empower the Tax Agency to seize digital assets for tax debts.

It is the intention of the Spanish Ministry of Finance to broaden its control over the monitoring of cryptocurrencies within the country in order to acquire the authority to seize digital assets in order to satisfy tax obligations.

Reports indicate that María Jesús Montero, the manager of the ministry, is currently proposing legislative revisions to the General Tax Law, particularly Article 162, to empower the Spanish Tax Agency to identify and confiscate crypto assets owned by taxpayers with overdue debts.

A royal order that went into effect on February 1, has increased the number of companies eligible to be given tax collection capabilities. Only financial institutions, such as banks, savings banks, and credit cooperatives, were able to Additionally, the Spanish Treasury Department intends to take a more strong stance against tax evasion.

This initiative seeks to compel financial institutions, including banks and electronic money institutions, to report on all card interactions. The rapid implementation of modifications poses certain regulatory difficulties.

Spanish Treasury is making an effort to take the initiative by enacting a variety of legislation to manage cryptocurrency.

In October 2023, the Spanish Ministry of Economy and Digital Transformation announced that the Markets in Crypto-Assets Regulation (MiCA), the first comprehensive crypto framework to be implemented by the European Union, will be enforced nationally in December 2025.

This is six months before Spanish Treasury stipulated deadline. Residents of Spain who own any cryptocurrency assets on platforms that are not available in Spain have until the end of the following month to declare those assets to the relevant tax authorities.

Beginning on January 1, 2024, the filing time for a Form 721 declaration will continue until the final day of March, when it will come to a conclusion. Starting from December 31, 2023, taxpayers, including individuals and corporations, must disclose the total amount of funds held in their cryptocurrency accounts located outside of the country.

Nevertheless, the obligation to register one’s overseas holdings is mandatory for only those individuals whose balance sheets contain more than the equivalent of 50,000 euros, which is around $54,000, in cryptocurrency assets.

In order to comply with the standard wealth tax form 714, individuals who keep their assets in wallets that they themselves manage are required to register their holdings.