“Spain’s Treasury encourages the use of hardware wallets (without knowing it)”


As part of the start of the income campaign this April 3, Spaniards are preparing to file their Personal Income Tax (IRPF) declaration. This begins a period in which the State will tax the income earned in the last year, including the profits obtained with bitcoin and other cryptocurrencies.

Lunaticoin and the economist and tax advisor José Antonio Bravo were talking about this topic, who drew attention to how complex the declaration process has become in Spainwhich every year incorporates new deductions and rules.

Among the new features for 2024, two new models stand out: 172 and 173, aimed at knowing cryptocurrency holdings on Spanish soil, as well as balances and all operations carried out in digital assets. Added to them is model 721, which aims to know the amount of cryptocurrencies stored abroad, if the balances exceed 50,000 euros.

As Bravo explains, one of the peculiarities of this latest model is that the obligation to report on bitcoin holdings applies to those who use Spanish exchanges, whether foreigners or non-residents in the country.

This is a series of demands that, as the advisor explains, require too much information, discourage the use of native platforms and lead users to turn to decentralized options to keep their crypto assets.

“That is why I have said that the Spanish Treasury, without knowing it, encourages people to buy hardware wallets,” says Bravo. The use of these wallets allows users to keep their cryptocurrencies “cold”, exercising self-custody of your money independently of the State.

“The companies that market these portfolios must be very happy, applauding and saying: thank you, Treasury of Spain,” the expert added jokingly.

He concludes that -with these new models- what is sought is discourage the use of cryptocurrenciesby making users comply with cumbersome procedures, and make them feel that they are being watched because their every move will be known.

Tax return forms are also very complex. and they cause a lot of confusion. A situation that has become evident in surveys carried out on the subject, which indicate that the majority of cryptocurrency users they don’t know how to declare their taxes This forces them to hire the service of third parties to take care of this work.

Lunaticoin invited tax advisor José Antonio Bravo to participate in his podcast. Source: YouTube.

The invasion of privacy grows with new models

During the interview, it was highlighted the rise of the amount of information about bitcoiners that the Treasury will have on hand this year, considering the volume of data that now has to be delivered with the new models.

Both Bravo and Lunaticoin They questioned the level of surveillance that the Spanish authorities want to impose, which invades privacy by requesting even intimate information.

According to Bravo, the degree of control seems clear, especially with model 721, which seeks to know about the cryptocurrencies held abroad. Information that is not available to the authorities and that now it will be obtained through this demand.

Bravo thinks that Spain is perhaps the only country in the world that applies these models, which access information through the data provided by the taxpayer proactively.

Thus sees the 721 as “a Spanish invention«, which possibly serves as an experiment. He adds that this model threatens capital freedom, because it asks for information to be provided that should not be reported. “What you have outside the country is private information,” he insists.

Maybe, in one way or another, what they want is for you to give them the information. This way you will know both what you have in Spain (through models 172 and 173) and what you have abroad. They add the two parts and find out about all your holdings. They assume that there will be a remainder that you would have in a wallet.

José Antonio Bravo, expert in taxation with cryptocurrencies.

On the other hand, the expert confirms that the Spanish government, and in particular the Treasury, are using Chainalysis surveillance tools, including Reactor.

However, he assures that they only use them to investigate the movements of users who handle large volumes of money in cryptocurrenciesand in cases where you suspect that a crime has been committed.

“If the average transactions are around 2,000 euros, for example, this would not be a case of monitoring operations with these expensive tools,” he notes. As reported by CriptoNoticias, the police agencies of Spain They have been using the software since 2022 to do their research.

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