Clear rules are tightening control over cryptocurrencies. This system emphasizes safeguarding and oversight of crypto activity. Bitcoin and similar services must provide annual disclosures from 2024 that detail customer activity, balances, and related operations. The move aligns with a royal decree approved by the government that introduces regulatory updates to implement amendments to Law 11/2021 of 9 July, aimed at preventing and countering financial fraud through enhanced reporting and surveillance of digital assets.
Among these updates, new reporting duties apply to the holding and transaction of virtual currencies under the Regulation. The stated objective is to improve tax control over taxable events arising from the ownership or use of these assets. Authorities have also expanded obligations for taxpayers regarding virtual currencies held or transacted, including those involving holdings abroad.
Initial statements concerning information obligations for virtual currencies must be filed starting January 1, 2024, with a one-year transition period from the original plan. Specifically, individuals and entities resident in Spain and permanent establishments of foreign residents that provide services to protect private cryptographic keys, and thus safeguard, store, and transfer virtual currencies on behalf of third parties, must report all virtual currencies held in custody.
Similarly, reporting covers exchange services between virtual currencies, intermediation of such transactions in any form between fiduciary currency or various virtual currencies, or services to protect private keys and to safeguard, store, and transfer virtual currencies on behalf of third parties. It also covers operations involving the acquisition, transmission, exchange, and transfer of virtual currencies, as well as collections and payments made in these currencies, where intermediaries operate under the conditions set by the ministry order approving the relevant model.
Abroad
Additionally, natural and legal persons, including foreign residents and permanent establishments not based in the region, must comply with Article 35.4 of Law No. 58/2003 of 17 December on General Taxation. For entities mentioned in this article, an annual disclosure statement must be filed for all virtual currencies located abroad, including cryptographic keys held on behalf of third parties to protect, store, and transfer virtual currencies as of December 31 each year. This applies to those who own or benefit from these currencies, even if they are authorized or possess other rights of disposition or have a real ownership interest. The obligation extends to service providers protecting privacy in these matters and mirrors requirements for asset holders in other jurisdictions.
The liability also covers those who own, are authorized to own, or are beneficiaries of the mentioned virtual currencies, or who hold the power to dispose of them, or who are the real owners and participants in any period of the year to which the statement refers, with the reference date being December 31 of that year.
In practice, these measures create a consistent framework for disclosing foreign-held digital assets, ensuring that regulators receive a complete view of an individual or entity’s exposure to crypto assets both domestically and abroad. The intent is to improve transparency, reduce opportunities for tax evasion, and align Spain’s approach with global efforts to monitor virtual currency activity. While the specifics may vary by jurisdiction, the overarching aim is the same: accurate reporting, full accountability, and robust risk management for digital asset holdings and transactions. This emphasis on clear, timely disclosures supports tax authorities in assessing taxable events and enforcing compliance across borders.
Authorities stress that compliance requires careful record-keeping of all virtual currency holdings and movements throughout the year, with particular attention to year-end balances and ownership structures. Businesses and individuals should review their crypto-related services, custody arrangements, and foreign-held keys to ensure they meet the updated reporting obligations and provide the required disclosures within the established deadlines. The changes underscore the importance of integrating crypto asset management with traditional tax reporting processes, rather than treating digital currencies as an isolated or niche area of finance.
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