The new administration in Spain under Pedro Sánchez is beginning to show its stance on cryptocurrency as new measures are introduced to cut down on tax evasion in the country.
The new law will require holders of cryptocurrency to declare their all their holdings. Finance Minister Maria Jesus Montero has stated that the new legislation will require “the identification of the holders and the balances contributed by these virtual currencies”.
This makes a notable shift in direction since the ousting of former Prime Minister Mariano Rajoy who was on the point of pushing forward legislation for possible tax breaks in order to create a more favorable environment for potential blockchain investment. Under Rajoy, cryptocurrencies were still being considered for legislation, with some of the digital currencies viewed as being “located in a grey area of regulation”, by the political party Podemos.
Alberto Montero, the deputy of the political alliance under Rajoy, presented favorable legislation to Spain’s lower house with a view that blockchain could significantly boost security levels for social and economic transactions, suggesting that blockchain had “enormous potential”.
Under the new tax laws, Spain clearly sees cryptocurrency as a potential source of revenue and is even proposing measures to track down crypto assets held offshore by Spanish nationals. To this end, the government has further plans to extend the range of its tax havens so that holdings, when tracked, can be taxed in the same way as fiat.
The government has indicated that a potential EUR 850 million in tax receipts could be the outcome of the proposed changes to its tax legislation.
The previous position was that Spanish Congress supported a draft regulatory framework for cryptocurrencies in theory. The Partido Popular’s original suggestion was that the state cooperated with the National Securities Market Commission (CNMV) and the Bank of Spain to coordinate its position on cryptocurrency in line with EU guidelines.
It now remains to be seen exactly which direction the Sanchez government takes regarding cryptocurrency legislation. The tax law regarding crypto is the first legislation to date to be made by the new administration. It is as yet unclear if the Unidos Podemos proposal for a body to oversee the implementation of blockchain technology and crypto regulation in the country is to go ahead.
The coalition formed from left-wing parties Podemos, United Left, Equo and smaller parties suggested the move in order to study the benefits of blockchain and implement its use in public administration in the country as well as to explore its industrial potential.
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