Cryptocurrencies are transforming the world completely. The only countries that are not considerably affected by it are the ones that don’t allow their trade, visit site. Entire Europe is affected by it, hence, Spain. Spain, a distinctly developed economy and the fourteenth largest GDP in the world, has seen substantial effects of cryptocurrencies on its economy.
The banks of Spain have taken some measures concerning cryptocurrencies. They are planning to provide crypto assets directly to their consumers. The banks are making necessary arrangements to keep up with the new regulations for this purpose. They meet with the anti-national money laundering instructions taken from other laws already.
Though Spain does not have any clear law specifying the use of cryptocurrencies, the Spanish Treasury states clearly that cryptocurrency users will have to pay taxes in some circumstances. The citizens of Spain are confused about the taxation system and its relation to cryptocurrencies.
Income tax, Value Added Tax, and Wealth tax are the major taxes paid by the citizens of Spain. But some taxes other than these also exist and influence the crypto investors. For instance, the Corporation Tax, Economic Activities Tax, and Successions and Donations. Crypto investors must regulate the amount of tax they have to pay according to the general legislation.
Misleading and ambiguous advertisements were a major reason for the complications around cryptocurrencies. Hence, Spain took steps to regulate vague advertising of crypto assets. These include social media influencers, assigning the stock market supervisor with allowing mass campaigns, and ensuring that investors know about the involved risk.
The rapid development of cryptocurrencies in comparison to fiat currencies is capturing the attention of regulators. It could put the financial system of Spain at risk if not kept an eye on it.
The government of Spain released an official bulletin that stated that advertisers and companies that promote crypto assets would have to notify the National Securities Market Commission monitors not less than ten days before the content is released. The National Securities Market Commission will categorically keep an eye on advertising for all kinds of crypto-assets and to comprise risk warnings about such investments.
The rules also include the service providers of crypto-assets when promoting their ventures and any person advertising on their own and on behalf of third parties. These individuals include influencers who have more than 100,000 subscribers or followers and are paid to promote and advertise crypto assets. The National Securities Market Commission also added that they have to inform the watchdog of advertising posts in advance and warn of involved risks.
Cryptocurrencies have undergone high volatility and unpredictability of prices, along with a considerable rise in rampant advertising to lure investors.
Other than this, there are no particular regulations of cryptocurrencies in Spain. The only certain thing is that they cannot be treated as legal tender like the Euro. Nevertheless, there are no problems for cryptocurrencies that are accepted or substantiated by a regulatory authority like the Bank of Spain or the National Securities Market Commission.
Mining is permitted in Spain, though cryptocurrencies are not regulated yet. There are still some exceptions to this, nonetheless.
Since the Spanish Law is very preservative of the rights of investors and customers, the government of Spain has been cautious and traditionalist. The reason behind this protectiveness is a large number of cases of fraud concerning finance and security during the recession. Cryptocurrency cannot be considered as money for legal tender legally. Only banknotes and coins called in euros and valid in other Eurozone countries will be considered as legal tender. Normally, whether under private or public law, the Euro shall be the central unit of account in legal entities.
Citizens of Spain who don’t report their cryptocurrencies on their income taxes will have to face serious accountability. The fine for failing to report cryptocurrencies can reach up to 10,000 euros. Also, the tax evaders will have to face penalties that range up to 150 per cent of the undeclared income.
Spain intends to compel citizens to provide comprehensive data on balances and transactions that are carried out in and out of Spain. As a consequence, the citizens of Spain must record their cryptocurrencies correctly on their tax returns.