Spain is stepping up its digital currency taxation efforts, and this time, it’s putting 66,000 digital currency owners on notice. The country’s tax authority has quadrupled the number of notices, offering the industry no reprieve even as the coronavirus ravages the country.
The Agencia Estatal de Administración Tributaria (AEAT) first put digital currency owners on notice last year. Back then, it sent close to 15,000 notices to this group to pay their due taxes. This time, the tax agency is spreading its radar to 66,000, sending notices to them from April 1 to June 30 as per a report by Europa Press.
The AEAT joins its U.S. counterpart, the IRS, which has been prolific in sending notices to digital currency owners. In its last round, it sent CP2000 notices to thousands, requiring them to settle their taxes within 30 days of receiving the letters. The IRS pools its data from the exchanges, taking advantage of a legal stipulation for all trading platforms to report their traders’ activity.
The AEAT directive comes at a time when the citizens are struggling to fight the COVID-19 pandemic. Spain is one of the worst-hit countries, with its number of cases only second to the U.S. The tax agency’s measures are most likely an effort to increase the government’s income sources as it struggles to fight the pandemic, an executive at a Spanish exchange believes.
Speaking to Cointelegraph, Javier Pastor, the chief sales officer at Bit2me said that the measures will have little effect on the exchanges. They may, however, be a precursor of transaction monitoring and stricter KYC requirements. He further believes that the lack of regulations in the industry makes it quite difficult for the tax agency to collect the taxes.
He stated, “This does not affect us much in the companies in the industry that have been doing things well. I think they are only scaring the novice user by applying such measures, plus I don’t think they are going to collect much tax revenue from the cryptocurrency sector because they are not even regulated in our country.”
The lack of regulations makes digital currency taxation a difficult task, but so does the lack of knowledge among the traders. Alon Muroch, the CEO of digital currency accounting firm Blox blames the tax agencies for this, saying they should have done more to educate the public. Speaking to CoinGeek, Muroch stated, “The generally low numbers of crypto holders submitting their holdings comes as no surprise due to the overall lack of transparency by the IRS, and minimal exposure of new regulation in the mainstream media, preventing investors from seeing the clear picture.”
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.