New Spanish anti-fraud law

[Citizen77]

in spain if you bought directly with fiat some crypto, and you store it in your own wallet with control of private keys, and not in any exchange if the amount is up to 50k€ (on 31st december or last quarter average), you dont have to declare this crypto, neither now or in the future with this new law

so the buys directly with fiat to crypto are not taxable and if you store it with control of priv keys are not required to inform

 

[Citizen77]

This is for anyone living or wanting to live in Spain.

A new law has just been passed which affects cryptocurrency owners and people who use a lot of cash for purchases amongst other things. The most important things of the new law are the following:

1. Tax amnesties are now prohibited
2. You can now just use a maximum of 1000 Eur in cash purchases (2500 Eur before, as in all other EU countries)
3. More countries will fall into the "offshore" status
4. You will have to declare all the cryptocurrencies you own (all their movements, purchases, sales, etc too), both in Spain and outside on the 720 Form. If you fail to do so you could pay up to 150% of the money that you have not declared


TLDR: Stay away from Spain at all costs

points 1, 2 and 3 im agree

point 4 is not correct at all, purchases are wrong if you do what i say previous reply,

the movements if you mean changes between crypto to crypto, then yes, there is a gain or loss which have to declare it

cryptocurrecies you own in spain and you bought it with fiat directly has absolutely no duty to declare

the 720 form is only right now for assets or bank accounts outside of spain if it adds more than 50k euro (on 31st december or average last quarter)

the law still has yet to say wich amount minimum is for crypto

 

[Citizen77]

You are legally required to declare everything, however, you can simply not do it but you'd be breaking the law. You may or may not be caught, they may not even be able to get enough proof against you, but if they eventually do, they'll go after you.

sorry sir but i read this and must to say is not true at all, ¨ declare everything¨ is not correct

 

[knuk]

points 1, 2 and 3 im agree

point 4 is not correct at all, purchases are wrong if you do what i say previous reply,

the movements if you mean changes between crypto to crypto, then yes, there is a gain or loss which have to declare it

cryptocurrecies you own in spain and you bought it with fiat directly has absolutely no duty to declare

the 720 form is only right now for assets or bank accounts outside of spain if it adds more than 50k euro (on 31st december or average last quarter)

the law still has yet to say wich amount minimum is for crypto

So form 720 (the Spanish equivalent of FBAR) is only for foreign assets. Do you know what would happen if the crypto exchange is actually based in Spain? Or better yet, if an exchange has a Spanish subsidiary?
Does it really matter the operational aspect of the location of physical storage of the currency itself, or is it enough that a customer has an account with the local Spanish subsidiary.

So, as an example.
Lets say that a Spanish branch of a global exchange is operating in Spain. Spanish customers open an account at this local branch of the crypto exchange and then they buy crypto.
These Spanish customers can only access to their dashboard and check their balances if they log in from the Spanish version of the exchange.

But in the backend the exchange transfers the bitcoins to, lets say, Xapo's vault for cold storage in Switzerland as a routine security measure.

And to add more complexity, the company hq and/or holding company is registered in Seychelles or some caribbean island.

Does the corporate structure and/or the internal operation running in the backend define how the clueless Spanish customer will be taxed?
This would be completely unreasonable as it is completely out of his hands. From the Spanish customer's perspective he has a Spanish account and his money is in Spain.

If you have any insights about this, I would be grateful!
Thanks

 

[legrant]

in spain if you bought directly with fiat some crypto, and you store it in your own wallet with control of private keys, and not in any exchange if the amount is up to 50k€ (on 31st december or last quarter average), you dont have to declare this crypto, neither now or in the future with this new law

so the buys directly with fiat to crypto are not taxable and if you store it with control of priv keys are not required to inform

Yes, you're right. If you buy crypto with fiat from a Spanish bank while being a Spanish resident you don't have to declare, because, as it's pretty obvious, taxmen already know it and it would make 0 sense to declare what they already know you have (as it was already declared). However, if you make any profit or loss, exchange crypto for crypto or crypto for fiat, you'll have to declare that, which is essentially the same thing, you just skip the step of having to declare you have crypto because they already know you had that money.

points 1, 2 and 3 im agree

point 4 is not correct at all, purchases are wrong if you do what i say previous reply,

the movements if you mean changes between crypto to crypto, then yes, there is a gain or loss which have to declare it

cryptocurrecies you own in spain and you bought it with fiat directly has absolutely no duty to declare

the 720 form is only right now for assets or bank accounts outside of spain if it adds more than 50k euro (on 31st december or average last quarter)

the law still has yet to say wich amount minimum is for crypto

sorry sir but i read this and must to say is not true at all, ¨ declare everything¨ is not correct

"Las personas y entidades residentes en España y los establecimientos permanentes en territorio español de personas o entidades residentes en el extranjero, que proporcionen servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales, ya se preste dicho servicio con carácter principal o en conexión con otra actividad, vendrán obligadas a suministrar a la Administración Tributaria, en los términos que reglamentariamente se establezcan, información sobre la totalidad de las monedas virtuales que mantengan custodiadas. Este suministro comprenderá información sobre saldos en cada moneda virtual diferente y, en su caso, en dinero de curso legal, así como la identificación de los titulares, autorizados o beneficiarios de dichos saldos"
"Las personas y entidades residentes en España y los establecimientos permanentes en territorio español de personas o entidades residentes en el extranjero, que proporcionen servicios de cambio entre monedas virtuales y dinero de curso legal o entre diferentes monedas virtuales, o intermedien de cualquier forma en la realización de dichas operaciones, o proporcionen servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales, vendrán obligados, en los términos que reglamentariamente se establezcan, a comunicar a la Administración Tributaria las operaciones de adquisición, transmisión, permuta y transferencia, relativas a monedas virtuales, así como los cobros y pagos realizados en dichas monedas, en las que intervengan o medien, presentando relación nominal de sujetos intervinientes con indicación de su domicilio y número de identificación fiscal, clase y número de monedas virtuales, así como precio y fecha de la operación"

This basically means exchanges have to share your information (balances, personal information, buys, sells, transfers, exchanges, payments, income, etc).


When it comes to the 720:

"Información sobre las monedas virtuales situadas en el extranjero de las que se sea titular, o respecto de las cuales se tenga la condición de beneficiario o autorizado o de alguna otra forma se ostente poder de disposición, custodiadas por personas o entidades que proporcionan servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales".

This translates into: "Information about the cryptocurrencies located in foreign countries which you are the owner of, you are the beneficiary or you have control over them, guarded by people or entities (exchanges or someone holding your crypto) who hold the private keys...."


There is no 50k Eur minimum for cryptos, that's for, as you said, certain assets and bank accounts. So as of right now they could go after you even if you have $1.

 

[knuk]

Yes, you're right. If you buy crypto with fiat from a Spanish bank while being a Spanish resident you don't have to declare, because, as it's pretty obvious, taxmen already know it and it would make 0 sense to declare what they already know you have (as it was already declared). However, if you make any profit or loss, exchange crypto for crypto or crypto for fiat, you'll have to declare that, which is essentially the same thing, you just skip the step of having to declare you have crypto because they already know you had that money.



"Las personas y entidades residentes en España y los establecimientos permanentes en territorio español de personas o entidades residentes en el extranjero, que proporcionen servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales, ya se preste dicho servicio con carácter principal o en conexión con otra actividad, vendrán obligadas a suministrar a la Administración Tributaria, en los términos que reglamentariamente se establezcan, información sobre la totalidad de las monedas virtuales que mantengan custodiadas. Este suministro comprenderá información sobre saldos en cada moneda virtual diferente y, en su caso, en dinero de curso legal, así como la identificación de los titulares, autorizados o beneficiarios de dichos saldos"
"Las personas y entidades residentes en España y los establecimientos permanentes en territorio español de personas o entidades residentes en el extranjero, que proporcionen servicios de cambio entre monedas virtuales y dinero de curso legal o entre diferentes monedas virtuales, o intermedien de cualquier forma en la realización de dichas operaciones, o proporcionen servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales, vendrán obligados, en los términos que reglamentariamente se establezcan, a comunicar a la Administración Tributaria las operaciones de adquisición, transmisión, permuta y transferencia, relativas a monedas virtuales, así como los cobros y pagos realizados en dichas monedas, en las que intervengan o medien, presentando relación nominal de sujetos intervinientes con indicación de su domicilio y número de identificación fiscal, clase y número de monedas virtuales, así como precio y fecha de la operación"

This basically means exchanges have to share your information (balances, personal information, buys, sells, transfers, exchanges, payments, income, etc).


When it comes to the 720:

"Información sobre las monedas virtuales situadas en el extranjero de las que se sea titular, o respecto de las cuales se tenga la condición de beneficiario o autorizado o de alguna otra forma se ostente poder de disposición, custodiadas por personas o entidades que proporcionan servicios para salvaguardar claves criptográficas privadas en nombre de terceros, para mantener, almacenar y transferir monedas virtuales".

This translates into: "Information about the cryptocurrencies located in foreign countries which you are the owner of, you are the beneficiary or you have control over them, guarded by people or entities (exchanges or someone holding your crypto) who hold the private keys...."


There is no 50k Eur minimum for cryptos, that's for, as you said, certain assets and bank accounts. So as of right now they could go after you even if you have $1.

So as long as you possess the private keys and don't use third parties for custodial services, you are in the clear.
DeFi for the win, then. And P2P transactions.
Purchasing loads of crypto with cash and getting crypto transferred straight to your wallet would trigger zero obligations.

 

[legrant]

So as long as you possess the private keys and don't use third parties for custodial services, you are in the clear.
DeFi for the win, then. And P2P transactions.
Purchasing loads of crypto with cash and getting crypto transferred straight to your wallet would trigger zero obligations.

1) Technically, you should be okay, however, if you ever exchange those cryptos, you'll have to declare it. The key to the wallet containing cryptos should be located in Spain according to the law, it sounds weird, but yeah.
2) There's nothing about defi in the law that passed, however, pay attention to it because they may change it in the future.
3) As long as you're using legal money for the P2P transactions and everything that has been declared, you should be okay, if you're using untaxed money you're already committing an offense or even a crime if the amount is big enough.
4) As long as the cash is legal and the key to the wallet is in Spain, you shouldn't have to declare it. If the money is legal, technically taxmen already know you have that money anyways, but they'll lose track of any profits you make when they're in crypto.

 

[RGRG]

So many tax rules in Spain, declare, declare, declare. Declare.... and declare....

Im from Latin America and my Spanish dream about moving to Valencia and have a happy life with daughter&wife is vanishing.

The only door I got left open is the Spanish Compliant Bonds because of the many tax benefits it offers, however I couldn't find anywhere the yield that this type of bonds generates p/year, (4-5% p/year would make me happy), however looks like this bonds are more like a FA business to rip off clients with commissions, giving about 2-2.5% max yield per year after commissions.
Does.anybody knows the real yield that those Spanish Compliant bonds offers??

So for people having good investment lump sum to invest is better to go to Dubai, set up the business account and residency with a good portfolio on REITs, ETFs etc with a worldwide corporation that offer you 8-10% per year (conservative medium-low risk) and leave it compunding, withdrawing only needed to cover monthly expenses and have good live anywhere else outside the EU..

 

[legrant]

So many tax rules in Spain, declare, declare, declare. Declare.... and declare....

Im from Latin America and my Spanish dream about moving to Valencia and have a happy life with daughter&wife is vanishing.

The only door I got left open is the Spanish Compliant Bonds because of the many tax benefits it offers, however I couldn't find anywhere the yield that this type of bonds generates p/year, (4-5% p/year would make me happy), however looks like this bonds are more like a FA business to rip off clients with commissions, giving about 2-2.5% max yield per year after commissions.
Does.anybody knows the real yield that those Spanish Compliant bonds offers??

So for people having good investment lump sum to invest is better to go to Dubai, set up the business account and residency with a good portfolio on REITs, ETFs etc with a worldwide corporation that offer you 8-10% per year (conservative medium-low risk) and leave it compunding, withdrawing only needed to cover monthly expenses and have good live anywhere else outside the EU..

If all your money is legal and you're okay with paying 20-40% in taxes, you should be able to do that easily. However, if your plan is to make a lot of money, you're better off in another country and then come to Spain when you want to retire.

 

[RGRG]

If all your money is legal and you're okay with paying 20-40% in taxes, you should be able to do that easily. However, if your plan is to make a lot of money, you're better off in another country and then come to Spain when you want to retire.

true... it's actually 19% to 23% depending on the amount of capital gains but the thing that intriges me more is the fact that you have to declare assets, bank accounts, pretty much all you have worldwide and pay tax on capital gains even though you didn't withdraw any money.

And then on top of that up to 150% penalty fee for not declaring... WHF dude..

I mean, yo bro! give me a break, where is the privacy then. Just a little bit of space to breathe.


Another thing would be open the Resident bank on Dubai Non CRS and keep quite about it.

But that's unknown territory.. dark place.. a place you don't want to go...

 

[legrant]

true... it's actually 19% to 23% depending on the amount of capital gains but the thing that intriges me more is the fact that you have to declare assets, bank accounts, pretty much all you have worldwide and pay tax on capital gains even though you didn't withdraw any money.

And then on top of that up to 150% penalty fee for not declaring... WHF dude..

I mean, yo bro! give me a break, where is the privacy then. Just a little bit of space to breathe.


Another thing would be open the Resident bank on Dubai Non CRS and keep quite about it.

But that's unknown territory.. dark place.. a place you don't want to go...

Yeah Spain is sort of annoying when it comes to taxes, it's a very nice place to live though, I'd recommend you to take a look into the Canary Islands too

 

[RGRG]

Yeah Spain is sort of annoying when it comes to taxes, it's a very nice place to live though, I'd recommend you to take a look into the Canary Islands too

Have been there, lovely place, specially for us that speak spanish too, so easy to socialize and get to know people, really open to new comers..

So sad.. I've thinking in possible scenarios to live there without waisting our hard earn money in taxes and come to a conclusion that the best way is being an average guy making an average wage, paying the average tax, rent an small apartment, survive paycheck to paycheck

I also read about the EU Commision demanding a change in the Spanish Modelo 720, which could be a nice thing to remove. Also wealth tax that was temporary measure and noe this year announced as permanent tax..

Still dont know man. We will see what the future brings.

 

[legrant]

Have been there, lovely place, specially for us that speak spanish too, so easy to socialize and get to know people, really open to new comers..

So sad.. I've thinking in possible scenarios to live there without waisting our hard earn money in taxes and come to a conclusion that the best way is being an average guy making an average wage, paying the average tax, rent an small apartment, survive paycheck to paycheck

I also read about the EU Commision demanding a change in the Spanish Modelo 720, which could be a nice thing to remove. Also wealth tax that was temporary measure and noe this year announced as permanent tax..

Still dont know man. We will see what the future brings.

You should try to talk to a tax advisor in Spain, I'm sure you could find a way to live in a better way rather than paycheck to paycheck.

 

[knuk]

So @legran technically for someone who is planning to get the Spanish residency and eventual citizenship.
If my existing crypto stash would be acquired before getting the Spanish residency, and held personally in private wallets, there would be zero obligation in declaring that such crypto even exists.
And as long as we live in Madrid, I would be exempt from the wealth tax, so no declaration about its existence either.

But I would be required to declare that I am selling cryptos, whenever I use them for every day expenditures.
But how would the taxman know if my basis cost calculation is correct or not?

Also I would guess that selling crypto for cash in person would be out of the question if the plan is to become a citizen, as it would be freaking weird to explain how someone was able to live for two years with zero taxable events.

So I think that one possible alternative to explore is to do debt financing. Using Nexo, Celsius and/or BlockFi.
Instead of selling, get a portion of your "invisible" stash transferred to these platforms, get a loan in Euros on it. Technically not a taxable event, although I would love to hear a confirmation that it would work in Spain as well.
It is a new twist to the securities-backed lending.

 

[legrant]

So @legran technically for someone who is planning to get the Spanish residency and eventual citizenship.
If my existing crypto stash would be acquired before getting the Spanish residency, and held personally in private wallets, there would be zero obligation in declaring that such crypto even exists.
And as long as we live in Madrid, I would be exempt from the wealth tax, so no declaration about its existence either.

But I would be required to declare that I am selling cryptos, whenever I use them for every day expenditures.
But how would the taxman know if my basis cost calculation is correct or not?

Also I would guess that selling crypto for cash in person would be out of the question if the plan is to become a citizen, as it would be freaking weird to explain how someone was able to live for two years with zero taxable events.

So I think that one possible alternative to explore is to do debt financing. Using Nexo, Celsius and/or BlockFi.
Instead of selling, get a portion of your "invisible" stash transferred to these platforms, get a loan in Euros on it. Technically not a taxable event, although I would love to hear a confirmation that it would work in Spain as well.
It is a new twist to the securities-backed lending.

Spanish laws when it comes to cryptos are very new, so it's not 100% certain what they'll do to you or what they'll change in the law.

If you hide money and they catch you, you're going to have big problems. If your money is legal and you pay your taxes when it's required, you'll be fine. If you touch any grey areas, it's up to them.

 

[knuk]

Spanish laws when it comes to cryptos are very new, so it's not 100% certain what they'll do to you or what they'll change in the law.

If you hide money and they catch you, you're going to have big problems. If your money is legal and you pay your taxes when it's required, you'll be fine. If you touch any grey areas, it's up to them.

But in principle, I would guess that the rich people in Spain are also using SBLOCs as well to avoid the taxable event of their capital gains.
If that is true, it should be the same for lines of credits with crypto as collateral.

 

[legrant]

But in principle, I would guess that the rich people in Spain are also using SBLOCs as well to avoid the taxable event of their capital gains.
If that is true, it should be the same for lines of credits with crypto as collateral.

As I said, is the collateral you're using is legal and has been declared, you should be fine doing that

 

[knuk]

As I said, is the collateral you're using is legal and has been declared, you should be fine doing that

Yeah, but as you also mentioned, if the cryptos are only being held and not sold, there are no need for declaring its existence in the first place.

 

[legrant]

Yeah, but as you also mentioned, if the cryptos are only being held and not sold, there are no need for declaring its existence in the first place.

In theory, yes. However, if you're in Spain and you get a 100k Eur loan sent your bank using your crypto as collateral, trust me you'll have to explain a lot of things to taxman and probably the bank too. If the amount is low, you should be okay. They will want to know when you got the crypto, where were you residing when you got them, the prices, etc.

Anyways, if the current goverment keeps going this way, expect to have to declare every single crypto you own in the near future, so as I've been saying, if its legal and you can prove it you're good to go, if it's not, get ready.

 

[knuk]

In theory, yes. However, if you're in Spain and you get a 100k Eur loan sent your bank using your crypto as collateral, trust me you'll have to explain a lot of things to taxman and probably the bank too. If the amount is low, you should be okay. They will want to know when you got the crypto, where were you residing when you got them, the prices, etc.

Anyways, if the current goverment keeps going this way, expect to have to declare every single crypto you own in the near future, so as I've been saying, if its legal and you can prove it you're good to go, if it's not, get ready.

Yeah, the global trend on crypto taxation isn't very encouraging.
And if this is okay for now, probably this avoidance loophole might close eventually.

But so far this is my takeaway from this discussion:
If the cryptos were acquired before getting the Spanish residency, the Spanish government would have zero say on it.
And if I only held the cryptos without selling, no reporting requirements.
And if I get a line of credit with crypto as collateral, no capital gains taxes.
And if you live in Madrid, you are not subject from Wealth Tax.
So you would be compliant.