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New Spanish anti-fraud law

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.
1) "If the cryptos were acquired before getting the Spanish residency, the Spanish government would have zero say on it."
If they were legally acquired, yes.

2) "And if I only held the cryptos without selling, no reporting requirements."
If they're held in a cold wallet (trezor, ledger, etc) in Spain, I don't think you're required to report them. However, if you exchange crypto to crypto, crypto to fiat, or deposit them into an exchange, you'll have to declare that.

3) "And if I get a line of credit with crypto as collateral, no capital gains taxes."
There's nothing about defi/lending/borrowing in Spanish law, however, it's a tricky situation. In order to get a loan, you'll have to deposit the crypto into either Celsius, Nexo, BlockFi, etc; if they're in one of those platforms, the taxman can ask them for your info and you also have to declare that you have the cryptos on the website. So yes, you'll be able to avoid capital gains taxes but taxman may now know you have X amount of crypto.

4) "And if you live in Madrid, you are not subject from Wealth Tax."
That's correct, however, that doesn't mean you don't have to do anything, if you have over 2M Eur, you'll have to declare it.
 
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1) "If the cryptos were acquired before getting the Spanish residency, the Spanish government would have zero say on it."
If they were legally acquired, yes.

2) "And if I only held the cryptos without selling, no reporting requirements."
If they're held in a cold wallet (trezor, ledger, etc) in Spain, I don't think you're required to report them. However, if you exchange crypto to crypto, crypto to fiat, or deposit them into an exchange, you'll have to declare that.

3) "And if I get a line of credit with crypto as collateral, no capital gains taxes."
There's nothing about defi/lending/borrowing in Spanish law, however, it's a tricky situation. In order to get a loan, you'll have to deposit the crypto into either Celsius, Nexo, BlockFi, etc; if they're in one of those platforms, the taxman can ask them for your info and you also have to declare that you have the cryptos on the website. So yes, you'll be able to avoid capital gains taxes but taxman may now know you have X amount of crypto.

4) "And if you live in Madrid, you are not subject from Wealth Tax."
That's correct, however, that doesn't mean you don't have to do anything, if you have over 2M Eur, you'll have to declare it.
Regarding to point 3,
Lets say that I collateralize some ETH on Compound (DeFi) and get some DAI.
Then sell those DAI for EUR (or to USD first and then USD to EUR, if that pleases more the taxman). I guess that technically I would need to only need to declare the total amount of DAI that I exchanged for USD, but not what the what the collateral was neither the total amount of cryptos in my private wallet. Still no capital gains as exchanging DAI for USD is 1 to 1, and no need to report total holdings.
 
Regarding to point 3,
Lets say that I collateralize some ETH on Compound (DeFi) and get some DAI.
Then sell those DAI for EUR (or to USD first and then USD to EUR, if that pleases more the taxman). I guess that technically I would need to only need to declare the total amount of DAI that I exchanged for USD, but not what the what the collateral was neither the total amount of cryptos in my private wallet. Still no capital gains as exchanging DAI for USD is 1 to 1, and no need to report total holdings.
Sorry if I didn't explain it correctly, what you're saying is what I meant. You'll have to declare the loan amount (the dai sold for fiat), not all cryptos you have. But be careful as the law doesn't say anything about defi/lending/borrowing, so they may still try to collect taxes eventhough they're not right
 
btw, isn't this kind of a catch22? If my total net worth is in the crypto and it exceeds 2M, but if I never touch it I am not obligated to declare it, isn't it?
Crypto wallets don't have your name though, so even though you legally have to declare it, you can say the crypto isn't yours. You would be breaking the law if you do this, but it'll be hard for them to prove the wallet is yours.
 
Crypto wallets don't have your name though, so even though you legally have to declare it, you can say the crypto isn't yours. You would be breaking the law if you do this, but it'll be hard for them to prove the wallet is yours.
I don't get that part.
Lets go back to the hypothetical scenario where someone acquired cryptocurrencies before becoming a resident of Spain.
After acquiring residency in Spain, he never sells his cryptocurrencies stored in his own private wallet where he controls the private keys.
You mentioned that as long as he doesn't sell or transfer away to a custodian account.

But then there is a requirement to declare wealth over 2M.

Aren't these two in direct conflict?
 
I don't get that part.
Lets go back to the hypothetical scenario where someone acquired cryptocurrencies before becoming a resident of Spain.
After acquiring residency in Spain, he never sells his cryptocurrencies stored in his own private wallet where he controls the private keys.
You mentioned that as long as he doesn't sell or transfer away to a custodian account.

But then there is a requirement to declare wealth over 2M.

Aren't these two in direct conflict?
It's two completely different things. The 2M one is the wealth tax and the other one is taxmen trying to know which cryptos you have with new laws