Crypto-assets, cryptocurrencies and/or related service providers have not been traditionally regulated in Spain. These products or services have only been captured to the extent they were embedded in other financial products (e.g. funds or derivatives) or in case they could qualify as a financial instruments directly (e.g. security tokens).
The situation changed due to (i) the recent implementation of EU Fifth Anti-Money Laundering Directive (5AMLD) in Spain on 27 April 2021, and (ii) a new regulation regarding crypto-assets advertising published in March 2021, which is still pending its development by the National Securities Market Commission (CNMV ). As a consequence of the implementation of 5AMLD in Spain, (i) providers engaged in exchange services between virtual currencies and fiduciary currencies and (ii) custodian wallet providers, became obliged entities required to comply with the Spanish AML regulatory framework.
In addition, crypto exchange providers and custodian wallet providers that offer their services to Spanish residents need to be registered with the Bank of Spain and comply with some good repute and AML requirements. It should be stressed that this obligation affects not only Spanish crypto service providers but also foreign providers addressing their services to the Spanish market. Unlike other countries, apart from the required Bank of Spain registration, there is no broader prudential supervisory regime nor licensing requirements covering crypto providers.
The CNMV is also getting more active in the provision of guidance in this field. On top of a previous Q&A addressing the Spanish regulator`s view on several crypto regulatory matters (ICOS, crypto funds, etc), on 07 May 2021, the CNMV has updated its Q&A on funds and have included specific answers on the possibility of investments funds, and in particular UCITS, to invest in crypto assets.
Turning our attention to tax-related concerns, the Spanish Tax Legislator has not yet implemented specific rules for crypto or blockchain taxation – which means that the current Spanish tax framework would apply. However, with the aim to control tax fraud, a bill, still subject to Parliamentary approval, is expected to impose some reporting obligations to tax authorities on certain crypto players and on crypto holders, if some requirements and thresholds are met.
In parallel, the General Directorate of Taxes has issued several rulings in connection with taxation on activities from the crypto sector such as ICOs, tokens, mining, etc. However, there is more to come since there are still several scenarios without a specific administrative criteria. In a nutshell, some of the rulings published comprise the following taxes:
- Personal Income Tax: Type of income generated in trading activities, mining, etc. and the rules to be applied between crypto prior to converting in FIAT, methodology in partial sales, etc.
- Wealth Tax: How crypto assets should be declared for Wealth Tax purposes.
- VAT: On mining activities and transfer of crypto.
- Business Activity Tax: Derived from mining, trading, BTC ATM’s, etc.
