Spain party Sumar seeks crypto tax hike in legislative proposal

Spain’s Sumar Parliamentary Group has submitted a legislative proposal to Congress that could significantly increase the tax burden on Bitcoin, Ethereum, XRP, and other crypto assets. 

The Sumar is looking to make three amendments to a bill implementing Spain’s transposition of the European Union’s Markets in Crypto-Assets (MiCA) framework. The legislations in question include General Tax Law 58/2003, Law 35/2006 on personal income tax (IRPF), and Law 29/1987 that covers inheritance and donation tax.

Under the plan, individual gains from digital assets would be changed from the current savings base taxed at rates up to 30% to Spain’s general income tax base, which can go as high as 47%. Corporate tax treatment would also change, establishing a fixed 30% rate on crypto-related profits.

Samar group issued amendments, adding ‘risk traffic’ tag to crypto assets

According to congressional records submitted to the parliament on November 5, the amendments instructed the National Securities Market Commission (CNMV) to introduce a standardized “risk traffic light” for cryptos. 

The visual warning would be mandatory on all crypto investment platforms in Spain and would assess if a project is officially registered, supervised, or backed by reserves, and its liquidity profile.

“There is no justification for establishing different treatment between regulated and unregulated crypto-assets in the order of attachment, since both share the same economic nature, are digital representations of value or rights that can be transmitted and stored electronically, and may be attachable in accordance with the general criteria of ownership, availability, and liquidity,” the proposed bill read.

Proponents of the law changes believe it will help retail investors understand the risks of digital assets rather than going into the exponential market blindly. But some economists and pro-crypto lobbyists say tax increments are just “bureaucracy” and do little to address concerns in Spain’s crypto regulatory approach.

According to tax advisor José Antonio Bravo Mateu, the proposal is a “useless attack against Bitcoin, which is resistant against political attacks”. In a statement written on X last Monday, Mateu surmised that assets held in self-custody wallets cannot be supervised or seized through conventional processes, so the government may not be able to enforce the new framework.

“The only thing they achieve with these measures is that their holders residing in Spain think about fleeing when BTC rises so much that they don’t care what politicians say”, he said.

Moreover, per Lawyer Chris Carrascosa, the approach is “unenforceable” because cryptoassets not regulated by MiCA, like Tether (USDT), cannot be held by centralized and authorized custodians. Without an entity responsible for custody, assets of that kind cannot be seized by authorities.

“This modification is meaningless, impracticable and adds no value. On the contrary, it complicates the lives of CASPs who are the ones who ultimately have to execute seizure orders”, he said. 

According to his interpretation, approval of the amendments “will mean animal chaos throughout the crypto tax regime in Spain”. Carrascosa asked Spanish lawmakers to reconsider the changes because the country is already struggling with a  “complex and suffocating tax system”.

Alongside Sumar’s amendments, a separate proposal was forwarded by Treasury inspectors Juan Faus and José María Gentil to tax Bitcoin profits differently from other digital assets. 

Spain is still building a crypto oversight framework, crackdowns continue

The Spanish government made several changes to its crypto oversight laws over the past year, with new regulations now requiring individuals to report all digital asset holdings, transactions, and balances. 

Crypto service providers are required to report transactions to the Bank of Spain and the CNMV, which aligns with Spain’s policies and the EU’s MiCA framework, aimed at curbing tax evasion and fraud.

In early November, Cryptopolitan reported about the arrest of a man by Spanish police, accused of orchestrating a €260 million international investment scam on crypto, gold, and luxury goods. The suspect, known as A.R. and using the alias “CryptoSpain” online, allegedly managed the Madeira Invest Club, which launched its operations in 2023. 

According to the Ministry of Interior, the scheme lured more than 3,000 victims by promising guaranteed returns on crypto contracts, real estate, luxury vehicles, whisky, and digital art. The operation was ongoing in at least ten countries, including Portugal, the United Kingdom, the United States, Malaysia, and Hong Kong.

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