Spain Sees 348% Annual Increase in Tax Letters to Crypto Holders

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Spanish tax authorities have issued some 60,000 notices to suspected cryptocurrency holders and traders regarding their tax obligations, a rise of 348% compared to last year. Europa Press reports that the huge increase in notices represents a push from Agencia Tributaria to retrieve unpaid tax in certain sectors, including cryptocurrency and domestic and foreign property rentals. Last year saw the agency send out only 14,700 notices to cryptocurrency users, clearly showing a desire on their part to tap further into this sphere for potential income.

Tax Authority Digs Deeper

While there has likely been increased interest in cryptocurrencies during the past 12 months given the sector’s resurgence, the huge increase in notices being sent out doesn’t necessarily mean that crypto is suddenly more than three times more popular in the country.

The stated aim of the new campaign, according to Europa Press, is for the agency to “intensify the control” on these sectors, meaning that rather than a raft of new entrants having come into the space, the agency is likely taking a more in depth look into exchange activity and bank account behavior, picking up people it had previously missed.

Tighter Regulations Assisting the Authorities

The heightened activity around crypto accounts comes at a time when global crypto regulations are being ramped up, allowing authorities easier access to records of exchanges and transactions in general.

Agencia Tributaria launched their first big crackdown on crypto traders toward the end of November 2018, when they instructed banks in the country to report accounts that accessed cryptocurrency services. These individuals were then monitored to ensure that their tax submissions matched the funds sent to their accounts, with any large anomalies investigated.

Despite the extra powers being granted by new regulations and their existing connections with banks, the current notices will take the form of generic reminders to individuals that they have an obligation to pay taxes on their earnings, including crypto-crypto sales, the filing deadline for which falls on the last day of each year. If this doesn’t flush out all those the agency believes will owe tax, then it will use stricter measures to take what it is due.