Spain Lawmakers Propose New Crypto Tax Bill Targeting BTC and ETH

The Parliamentary Group of the Spanish electoral alliance Sumar has proposed changes to the existing tax laws to increase taxation on gains from Bitcoin (BTC) and Ethereum (ETH). According to the proposal, the assets would be taxed under the Personal Income Tax (IRPF) at the general rate, which will increase the tax from the current 30% cap under the savings tax base up to 47%.

In addition to the increase in tax rates, the group proposes to establish a mandatory visual risk “traffic light” system for cryptocurrencies to help retail investors understand the risk levels. It suggests the National Securities Market Commission (CNMV) put a color-coded label for each digital asset across investor platforms, evaluated by the asset’s performance, supervision, backing, and liquidity.

As a left-wing electoral alliance and political party formed by the Second Deputy Prime Minister Yolanda Díaz, Sumar’s views align with Prime Minister Pedro Sánchez, who approaches crypto with a cautious and regulatory-focused lens. However, the government has acknowledged blockchain’s potential for innovation despite the strict regulations.

Wealthy Crypto Holders in Focus Under the Proposed Stricter Tax Reforms

Following the rise of money laundering, terrorist financing, and online fraud since the early 2020s, the Spanish government has been finding ways to mitigate the risks, resulting in the implementation of European Union-aligned rules like MiCA (Markets in Crypto-Assets). Since 2021, taxpayers in Spain have been reporting their digital asset holdings under Law 11/2021. The Spanish Tax Agency (AEAT) has been considering the profits from these allocations as taxable capital gains (30%).

However, the Sumar Parliamentary Group has been raising concerns about this procedure, alleging that there are loopholes in the tax treatment. This resulted in the creation of a new bill. According to Sumar members, a reclassification with a cap of 47% could ensure that the wealthier crypto investors contribute a fairer share to the nation’s economy. However, there are oppositions to the bill, pointing to the practicality, competitiveness, and fairness.

Experts Warn of Economic Damage if Spain Implements the New Crypto Tax Bill

According to Cris Carrascosa, a lawyer with expertise in the legal side of crypto, the bill is going to cause absolute chaos in the entire crypto tax regime in Spain if approved. “ If any politician wants to stop this madness, please count me in,” she tweeted.

Critics fear that higher taxes could force promising blockchain-based businesses to move abroad, significantly affecting the country’s economy. In addition, there were even voices against the current 30% tax on savings income, and a further increase would categorize Spain into the high-tax realm. However, the burden is not equal to all since these rules primarily target the high earners.

About Sumar

Registered as an association in 2022, Sumar is an electoral alliance founded by Yolanda Díaz, the second deputy prime minister of Spain. It is a culmination of various left-wing and progressive parties, and is involved in activities such as workers’ rights, social protection, and climate action. The alliance participated in the 2024 European elections, securing three seats.

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