Spain’s Ministry of Treasury has admitted that Spanish citizens are not forced by law to declare their cryptocurrency holdings under the disputed Model 720, which involves declaring funds held abroad. While the antifraud law approved last year established this duty, there are still no rules regarding cryptocurrency after Model 720 was declared to be illegal by European laws.
The Spanish Treasury Ministry has admitted that the current legal framework does not include the obligation for Spaniards to declare their cryptocurrency holdings under Model 720, which has to do with funds held abroad.
The Spanish Tax Agency confirmed that citizens don’t have any duty to report their cryptocurrency holdings, not even in an informative way, after the underlying ruleset has not been established by the authorities.
This means that citizens need not include any of their crypto-related info in the upcoming Model 720 statement corresponding to last year’s movements, even with the antifraud law approved last year establishing it. On this development, Esau Alarcon, Attorney in Gibernau, stated:
"You don’t have to declare. There is no information to declare. There are no values included, nor is there cryptocurrency data within the value boxes of Model 720. There is no reasonable interpretation that allows us to understand that cryptocurrencies are declared in this model."
Other tax areas also suffered no changes regarding the declaration of cryptocurrencies. The income tax form does not include a specific area to include cryptocurrencies. The only change that has been executed is that now cryptocurrencies have a specific area that needs to be filled out by taxpayers. However, as local media informs, this is just a formality, because Spanish citizens were already declaring cryptocurrency as wealth in other ways.
There are projects to include cryptocurrencies in a new, updated Model 720 in the future, and that new regulation might be approved for next year’s tax season. The old Model 720 was declared to be illegal due to some of its astounding penalties by European courts, and some taxpayers are already being reimbursed by authorities regarding penalties paid under this model.
The remaining law includes the obligation to inform about cryptocurrency but leaves out the penalties criticized by the EU.