Business 20 February 2018

Gerald Fenech

Spain mulling ideas for blockchain, crypto companies’ tax breaks

European Union countries are looking favorably on blockchain and crypto currencies in an attempt to shore up their economy. After Malta announced that it was looking to provide a safe legal environment for the operation of blockchain technology, it is now the turn of Spain to actively consider providing tax breaks for blockchain-based companies and by extension, cryptocurrency exchanges.

Proposals to introduce tax exemptions for companies using blockchain technologies and cryptocurrency have been put on the table in Spain. The ruling People’s Party is preparing new legislation that will also offer incentives to entrepreneurs raising funds through ICOs. If lawmakers adopt the amendments, investors will not be required to report crypto assets under a certain threshold. This will undoubtedly provide an excellent environment for those companies who wish to pursue their business in blockchain.

The People’s Party intends to seek experts’ advice to finalize and push through the legislation in parliament. The ruling majority will also study developments in other countries that have advanced further in adopting their legal frameworks. Switzerland was mentioned as an example in that respect, where the Alpine country has already become a leader in Europe after establishing a Crypto Valley in Zug and enacting guidelines on initial coin offerings (ICOs). However, Switzerland is a different ball game since it is already known for its financial secrecy so such proposals are definitely more adaptable there.

The authors of the bill are considering proposals to entice businessmen to use blockchain for crowd fundraising through ICOs. The draft also introduces tax breaks for small companies specializing in sectors such as 3D printing or data processing.

The new legislation may also include a threshold below which entrepreneurs would not be required to report a cryptocurrency investment. Spain’s markets and securities regulator is reportedly preparing the provisions for crypto investor protection.

“We want to set up Europe’s safest framework to invest in ICOs” the Spanish deputy said.

In a post published on his website in December, Minister Teodoro Garcia Egea attempted to win support for his ideas by educating the public about blockchain technology, which he compared to the institution of the public notary.

“A notary is a highly qualified and independent professional, who provides guarantees for security and legality,” according to the lawmaker, noting that in the Internet, these characteristics can be attributed to blockchains.

The blockchain technology does not replace the notary, but provides reliability, transparency and traceability for contracts between individuals beyond what notaries can do, Garcia Egea wrote. Blockchains do not replace the services of legal professionals and from regulatory point of view, and the technology is not a threat but a great opportunity to do a better job, the lawmaker added.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

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