Cryptocurrency holders in Spain may soon be forced to report their crypto holdings, as the government is planning on drafting a regulation that would reportedly crackdown on crypto tax fraud.
Spain Working on Combating Crypto Tax Fraud
According to Reuters on Tuesday (October 13, 2020), a government spokeswoman Maria Jesus Montero, who serves as Spain’s Minister of Finance, revealed that the government is working on a draft bill for crypto taxing. The government official stated that the bill was part of a robust legislation that seeks to clamp down on tax fraud.
Maria Jesus Montero revealed the government’s plans after the weekly cabinet meeting. If the bill is passed, cryptocurrency holders would be mandated to disclose their holdings and profits to the Spanish tax agency.
Spain has been trying to combat tax evasion since 2018. As reported in April 2018, the Agencia Estatal de Administracion Tributaria (AEAT), the country’s tax authority asked crypto-related firms to submit the names and data of cryptocurrency traders.
In October of the same year, the government approved a draft bill that would mandate crypto investorsholding $57,000 worth of crypto in their wallets to identify themselves and disclose their exact token holdings. Shortly after, authorities identified 15,000 crypto holders who would be made to pay taxes. Earlier in 2020, the AEAT revealed plans to dish out 66,000 tax letters to Bitcoin investors.
While information on the proposed bill remains scant, Spain’s government is not willing to leave any stone unturned in its crusade against tax evasion. Cryptocurrency holders in the country would have to ensure proper reporting to avoid penalties.
More Governments Getting Serious With Crypto Taxation
Outside of Spain, more countries continue to shine their spotlight on the nascent industry with the introduction of crypto tax laws. In the United States, the Internal Revenue Services (IRS) has in the past sent various warning letters to remind crypto holders to fulfill tax obligations.
In September, the IRS reportedly altered its 1040 tax form by placing the crypto question in a prominent part of the document. The alteration leaves no excuse for oversight on the part of the crypto holder. Also, the U.S. tax agency asked the crypto exchanges to improve on their reporting.
The South Korean government is also making plans to impose tax on crypto transactions. However, economists in the country believe that the government’s move could hamper the growth of the nascent industry in South Korea.
Australia has also made efforts to clampdown on tax evaders. The country’s tax body earlier collected data to certify that crypto investors were reporting holdings accurately. Still trying to ensure compliance, the tax authority sent out 350,000 warning letters to BTC holders to remind them of their obligations.