Spain’s tax agency is set to send over 300,000 tax notices to digital asset owners for their 2022 fiscal year’s tax obligations.
The Tax Administration Agency will dispatch 328,000 notices this year, a 40% rise from last year’s tally. This year’s notices are over 20 times higher than the 15,000 the agency sent to digital asset holders in 2021.
While this number has shot up over the past two years, it still represents a small fraction of the digital asset owners in the European country. A report by the National Securities Market Commission last August revealed that over 6.8% of the population, or 3.2 million people, own some digital assets.
The growth in tax enforcement is due to the rising use of blockchain analytics technology as well as cooperation from the exchanges, a representative of the tax authority said.
“The reason for the gradual growth is the increasing information that the Spanish Tax Agency has about operations with cryptocurrencies, and that information will be expanded next year with the new reporting obligations planned for crypto exchanges,” the representative told one outlet.
Spain joins a growing list of countries pursuing taxes from digital asset holders. In the U.S., the IRS has been sending letters to crypto holders demanding taxes since 2019. With each new year, the number of letters has risen as the agency leverages new technology. The IRS has also relied on information from American exchanges, including Kraken and Coinbase (NASDAQ: COIN).
In Europe, the U.K. has stepped up its efforts as well. Last month, the Chancellor of the Exchequer, Jeremy Hunt, announced that taxpayers, for the first time, must identify their digital asset returns separately. The move is set to earn the U.K. government $12 million annually.
Taxation remains the one aspect of digital assets that governments are quickly working on. Some countries like India have been anti-Crypto for years but are moving towards taxing Crypto holders and have been taxing VASPs for years. Others, like Kenya, are even quickly pushing for legislation that brings digital assets under their tax agencies, even though they have yet to issue proper regulations to protect investors.
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