Spanish Crypto Holders to Be ‘Burdened’ with Fresh Crypto Declaration Rules

cryptonews.com:

Crypto industry insiders have hit back at the Spanish government’s latest plans for the sector: A fresh effort to make citizens who hold coins on overseas platforms declare their holdings.

As previously reported, an attempt to force Spaniards with coins on foreign exchanges or in overseas wallets to declare their holdings descended into “chaos” earlier this year. The Treasury and the Agencia Tributaria (Spain’s tax body) were forced to abandon plans to make citizens list their crypto holdings on the much-vilified Modelo 720 form. The latter is a declaration of taxable assets, such as stocks and real estate, that are held outside Spanish territory.

But clerical errors appear to have derailed these plans, with the Treasury deciding at the last moment to allow crypto holders off the hook. However, it looks like the Treasury and the tax body are now ready to try again – and have rolled out proposals for a new document that they want to call Modelo 721.

This new document, unlike its predecessor, would have a designated field for cryptoassets entitled “virtual currencies located abroad.” The tax body’s proposal also suggests writing crypto declaration obligations into the country’s tax code.

If the proposal is accepted by the government, declarations for coins held during 2022 would need to be made “between January 1 and March 31, 2023.”

However, commentators have agreed that the proposal is wrought with problems.

Potential bugs include the fact that customers would be obliged to work out for themselves whether the crypto platforms they use are actually based abroad or not.

Many crypto trading platforms claim to be fully decentralized, meaning (in theory, at least) they are neither “domestic” nor “foreign” from a Spanish customer’s