Spain’s crypto tax laws could face tighter scrutiny in the future as the country’s opposition party proposed amendments to the existing crypto tax laws. The country’s Sumar parliamentary group has unveiled amendments to reform three major laws affecting crypto, such as the Income Tax Law, the General Tax Law, and the Inheritance and Gift Tax Law.
At the moment, profits gained through cryptocurrencies are taxed under savings-income brackets, which is nearly 28%-30%. If the amendment comes into existence, the tax category will fall under general income tax brackets, where wealthy individuals have to pay up to a substantial 47% tax, and corporate holders have to pay a flat 30% tax on crypto profits.
Feud spreads over Spain’s new crypto tax proposal
Increased crypto tax on crypto gains is indeed a big headache for crypto users in the country. When several countries like the UAE have zero tax on personal crypto gains, Spain’s parliamentary group’s proposal is creating a heated discussion among crypto watchers on the X social media platform.
The countries that apply very high taxes on technologies like crypto would likely end up in failure, as talented people and investment money go out to other countries where better tax rules exist. Instead of high taxation on crypto profits, it is always better to lower the range of tax rates.
A lawyer by the name Cris Carrascosa argued that the new tax reforms will negatively impact the country’s crypto industry and ruin 99% of crypto assets. She also underscored that it would drive away innovation and investment. Her argument also went over the fact that the new amendments would change the current tax rules applicable to assets under the European Union’s crypto regulatory framework – MiCA.
“We may agree or not on opinions, but the technical precision on the part of a Group that proposes amendments in our already complex and suffocating tax system SHOULD NOT be acceptable,” said Cris in a connected post.
For Spanish Economist José Antonio Bravo Mateu, the Sumar party’s amendment comes out of a misunderstanding about the technology. If lawmakers do not come forward to stop the proposal, it would create an outflow of investor capital from Spain.
He also stated that amendments to three major tax laws are “useless attacks against Bitcoin”.
However, for Sumar, crypto profits are like speculative gains accumulated by wealthier individuals, and this could be the reason for introducing their landmark amendments.
Spain is one of the countries in the European Union, where the MiCA framework is reportedly helping the crypto industry to thrive in several jurisdictions. If the crypto tax reform goes live, there would be more chaos in the industry, which would discourage investment and disrupt innovation.
