Spain Proposes Crypto Tax Increase to 47% on Bitcoin and Ethereum Gains, Triggering Strong Industry Backlash

Spain Proposes Crypto Tax Hike to 47 Percent Amid Industry Backlash

Spain’s Sumar parliamentary group has stirred controversy by submitting amendments that would sharply increase taxes on cryptocurrencies, including Bitcoin, Ethereum, and XRP.

The proposal targets gains from digital assets not classified as financial instruments, shifting them from the current savings tax base with rates up to 30% to the general income tax bracket, where rates can reach 47%.

Corporate crypto profits would also face a fixed 30% tax under the revised Corporate Income Tax framework.

Will Higher Taxes Drive Crypto Holders Out of Spain

Economist and tax adviser José Antonio Bravo Mateu criticised the plan on X, calling it a “pointless attack against Bitcoin” and arguing that assets held in self-custody wallets cannot be monitored or seized through conventional means.

He warned,

“The only thing these measures achieve is to make Spanish-resident holders think about fleeing when BTC rises so much that they won’t care what the politicians say.”

Lawyer Cris Carrascosa described the amendments as “unenforceable,” highlighting difficulties in applying seizure rules to tokens like Tether’s USDt, which cannot be held by regulated custodians under EU MiCA rules.

Carrascosa noted:

“This modification is meaningless, impracticable and adds no value. On the contrary, it complicates the lives of CASPs who are the ones who ultimately have to execute seizure orders.”

He further explained that the approval “will mean animal chaos throughout the crypto tax regime in Spain.”

Risk Traffic Light System Proposed to Protect Investors

Beyond taxation, Sumar’s proposal instructs the National Securities Market Commission (CNMV) to implement a visual “risk traffic light” system for cryptocurrencies.

The system would be mandatory on all crypto investment platforms in Spain and evaluate projects based on registration status, regulatory supervision, asset guarantees, and liquidity.

Proponents argue the measure will give retail investors clear information to understand the risks before investing.

Seizable Assets Expansion Sparks Concern

A contentious aspect of the proposal is the classification of all cryptocurrencies as attachable assets eligible for seizure, extending beyond the scope of MiCA-regulated tokens.

Critics say this expansion is impractical given the nature of decentralized digital assets.

The bill states,

“There is no justification for establishing different treatment between regulated and unregulated crypto-assets in the order of attachment, since both share the same economic nature.”

However, experts remain sceptical about enforcement.

Separate Calls for Special Bitcoin Tax Rules

In contrast, Treasury inspectors Juan Faus and José María Gentil have suggested a more favourable regime for Bitcoin, allowing taxpayers to apply FIFO or weighted-average methods to wallets and adjust values when moving assets between them.

This approach aims to prevent tax manipulation while recognising Bitcoin’s unique characteristics.

Spain Tightens Crypto Oversight Amid Ongoing Crackdowns

Spain has been strengthening its crypto oversight over the past year, requiring individuals to report all digital asset holdings and transactions, while service providers must report to the Bank of Spain and CNMV.

Recent enforcement includes the arrest of a man operating the Madeira Invest Club, allegedly scamming over 3,000 investors across at least ten countries, promising guaranteed returns on crypto, real estate, luxury vehicles, and digital art.

How Spain’s Plans Compare Globally

While Spain considers increasing crypto taxation, Japan is moving in the opposite direction.

The Financial Services Agency (FSA) plans a flat 20% capital gains tax on cryptocurrencies, aligning them with equities and significantly reducing the tax burden compared with previous rates that could reach 55%.

This contrast highlights how global approaches to digital assets are diverging, with Spain favouring tighter control and higher taxes, while Japan seeks to encourage trading and investment.