The Spanish government is poised to implement significant changes to its cryptocurrency tax framework, with proposals from the Sumar Parliamentary Group suggesting a drastic increase in tax rates. If these amendments are approved, individuals could see their crypto gains taxed at a staggering 47%, while corporations would face a 30% tax on their digital asset profits.
The proposed legislation seeks to revise three key tax laws, fundamentally altering how profits from cryptocurrencies are classified and taxed. Currently, gains from digital assets are taxed under the savings tax base at rates of up to 30%. The Sumar group aims to shift this classification to the general Personal Income Tax (IRPF) framework, where the highest earners are subject to tax rates reaching 47%.
Experts have expressed concern that this change represents a major shift in Spain”s treatment of digital assets, aligning them more closely with ordinary income rather than investment income. Economist and tax advisor José Antonio Bravo Mateu criticized the amendments, labeling them as “clearly go against Bitcoin, Ethereum, and other cryptocurrencies,” and described these efforts as “useless attacks against Bitcoin.”
Looking at precedents set by India, which imposed a 30% tax on crypto gains in 2022, experts warn that high tax rates could lead Spanish investors to migrate their trading activities to foreign exchanges. This trend has already been observed in India, where domestic exchanges suffered from reduced trading volumes and liquidity as investors sought more favorable conditions abroad.
In addition to the tax hikes, the proposals include the introduction of a “crypto traffic light” risk warning system. This initiative would require the National Securities Market Commission (CNMV) to create color-coded warnings for various crypto products, indicating their risk levels based on regulatory oversight and liquidity. Critics argue that such a simplistic labeling system may not adequately represent the complex nature of different cryptocurrencies.
Furthermore, the Sumar group aims to classify all cryptocurrencies as seizable assets, extending regulations that currently apply only to tokens under the EU”s Markets in Crypto-Assets (MiCA) framework. Legal experts have raised significant concerns regarding the feasibility of this measure, suggesting it could prove unenforceable, especially for tokens not held by local custodians.
Spain”s tax authority (AEAT) has been increasingly active in regulating the digital asset landscape, yet its efforts have often been met with confusion due to unclear laws. A recent incident, where a trader received a €9-million tax bill despite making no profit, has drawn criticism and highlighted the need for clearer guidelines within Spanish tax legislation.
Interestingly, while the Sumar proposals push for stricter regulations, another faction of tax inspectors suggests a separate, lighter tax regime for Bitcoin. This idea, which has garnered attention within the crypto community, aims to recognize Bitcoin”s unique attributes compared to other digital assets.
As the proposals undergo review by lawmakers, the future of Spain”s digital asset sector hangs in the balance. Observers within the industry are bracing for potential turbulence, with critics warning that the amendments could lead to chaos in Spain”s crypto tax regime and drive high-value investors to seek more favorable jurisdictions.
