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Spanish Treasury Proposes Cryptocurrency Seizures for Tax Debts

Jonathan Wong

Jonathan Wong

05 February 2024

A tax reform proposed by the Spanish Treasury would allow the seizure of cryptocurrency assets to pay off debts. The proposal designates electronic money businesses as tax collection agents, enabling the state administration to impose an embargo on digital assets.

The Spanish Treasury aims to take command of taxpayers' bitcoin holdings by amending the tax code, allowing the national tax inspector to seize cryptocurrency in the process of debt collection. The plan was submitted to the EU in 2021 and is expected to be implemented soon.

Additionally, this year taxpayers must report any bitcoin holdings outside the nation for the first time, to prepare for the new rule. Regulators will need to adjust to the new tax framework and EU regulations when implementing the cryptocurrency laws.

Spanish regulators face the challenge of aligning with the new tax regulations while considering EU-wide regulations such as MiCA and the general EU tax directive. The rapid implementation of these cryptocurrency laws will require modifications and adaptations.