Spain to Seize Crypto Assets for Tax Debt Payment

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The Spanish government will implement rules allowing for the seizure of crypto assets to settle tax debts.

According to Cointelegraph, the Spanish Ministry of Finance is developing legislative reforms to the General Tax Law, particularly Article 162.

The development of this article will empower the Spanish Tax Agency to identify and seize crypto assets held by individuals or companies with outstanding tax debts.

Spanish residents holding any crypto assets on non-Spanish platforms have until the end of next month to report them to the tax authorities.

The declaration submission period for Form 721 commenced on January 1, 2024, and concludes on the last day of March. Individuals and entities are required to declare the amount of funds held in their offshore crypto accounts as of December 31, 2023.
Individuals possessing crypto assets worth 50,000 Euros or approximately US$54,000 or more are obliged to report their offshore crypto assets.

Those holding their assets in self-custodian wallets must report them through the standard wealth tax form, namely Form 714.

The obligation to report crypto assets both domestically and abroad for Spanish citizens is a governmental measure to ensure compliance with crypto asset ownership.

In April 2023, the government sent out 328,000 warning notices to individuals who failed to pay taxes on their crypto holdings for the fiscal year 2022, indicating a 40% increase compared to the 150,000 notices sent out the previous year. In contrast, there were only 15,000 notifications in 2021.

Spain Actively Monitors Crypto Assets

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Meanwhile, Spain has actively begun monitoring crypto assets. For instance, in October, the Spanish Ministry of Economy and Digital Transformation announced it would implement Market Regulations in Crypto Assets, the first comprehensive crypto framework in the European Union at the national level, by December 2025, six months ahead of the official deadline.

Furthermore, in November, Spain's main financial regulator, the National Securities Market Commission, initiated its first case against a technology provider for violating crypto promotion rules.

These regulatory developments reflect Spain's commitment to ensuring responsible and transparent use of crypto assets within its jurisdiction.

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