Mere 5.3 percent Spaniards crypto users get warning to disclose income taxes

The Spanish tax agency contacted just 5.3 percent of the total Spanish crypto investors for disclosing income taxes, Bitcoin.com reported. This small percentage indicates that the national tax agency could reach out to only 2,33,000 investors, out of the estimated 4.4 million Spanish citizens that have invested or made transactions with cryptocurrency.

The Spanish tax agency has fallen short of their target since last year to reach maximum crypto investors for declaring their crypto assets and being liable for taxation. Although these warnings have led to a 16 percent increase in the total number of taxpayers since last year. The crypto investors liable for tax has increased to 16 percent this year from 14,800 in 2021.

The head of the Spanish Tax Agency Jesús Gascón explained the the increase in the number of crypto tax payers with these reasons:
- It has been possible due to a rise in the sources of information for cryptocurrency transactions in comparison to previous years.
- The increased information is in turn attributed to the growing awareness of Spaniards about the cryptocurrencies and various movements of funds related to these.

However, the knowledge of an average Spaniard about the process of declaring cryptocurrency operations is still low. CEO and co-founder of Taxdown, a company that processes online income tax statements, Enrique Garcia said that quite a lot of taxpayers still do not know the way to present these assets or the eligibility for paying taxes on crypto assets. The Spanish tax agency has specifically created two special sections for declaring cryptocurrency tax income and heritage. In the current tax season, only cryptocurrency holders who have purchased and sold who have only bought and held their cryptocurrencies won’t be eligible for paying taxes on the assets.

In March 2022, the Spanish Treasury Ministry stated that the current legal framework will not include the obligation for Spanish citizens to disclose their cryptocurrency holdings held abroad under model 720. The model was repealed after being called illegal by the EU for extremely harsh penalties.

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