New Spanish anti-fraud law

[legrant]

1) "If the cryptos were acquired before getting the Spanish residency, the Spanish government would have︀ zero say on it."
If they were legally acquired, yes.

2) "And if I only︁ held the cryptos without selling, no reporting requirements."
If they're held in a cold wallet︂ (trezor, ledger, etc) in Spain, I don't think you're required to report them. However, if︃ you exchange crypto to crypto, crypto to fiat, or deposit them into an exchange, you'll︄ have to declare that.

3) "And if I get a line of credit with crypto︅ as collateral, no capital gains taxes."
There's nothing about defi/lending/borrowing in Spanish law, however, it's︆ a tricky situation. In order to get a loan, you'll have to deposit the crypto︇ into either Celsius, Nexo, BlockFi, etc; if they're in one of those platforms, the taxman︈ can ask them for your info and you also have to declare that you have︉ the cryptos on the website. So yes, you'll be able to avoid capital gains taxes︊ but taxman may now know you have X amount of crypto.

4) "And if you︋ live in Madrid, you are not subject from Wealth Tax."
That's correct, however, that doesn't︌ mean you don't have to do anything, if you have over 2M Eur, you'll have︍ to declare it.

 

[knuk]

Regarding to point 3,
Lets say︇ that I collateralize some ETH on Compound (DeFi) and get some DAI.
Then sell those︈ DAI for EUR (or to USD first and then USD to EUR, if that pleases︉ more the taxman). I guess that technically I would need to only need to declare︊ the total amount of DAI that I exchanged for USD, but not what the what︋ the collateral was neither the total amount of cryptos in my private wallet. Still no︌ capital gains as exchanging DAI for USD is 1 to 1, and no need to︍ report total holdings.

 

[legrant]

Sorry if I didn't explain it correctly, what you're saying is what I meant. You'll have︀ to declare the loan amount (the dai sold for fiat), not all cryptos you have.︁ But be careful as the law doesn't say anything about defi/lending/borrowing, so they may still︂ try to collect taxes eventhough they're not right

 

[knuk]

btw, isn't this kind of a catch22? If my total net worth is in‍ the crypto and it exceeds 2M, but if I never touch it I am not⁠ obligated to declare it, isn't it?

 

[legrant]

If it's your crypto, you'll⁠ have to declare it (wealth tax)

 

[legrant]

Crypto wallets don't have your⁠ name though, so even though you legally have to declare it, you can say the⁤ crypto isn't yours. You would be breaking the law if you do this, but it'll⁣ be hard for them to prove the wallet is yours.

 

[knuk]

I don't get that part.
Lets go back to the⁤ hypothetical scenario where someone acquired cryptocurrencies before becoming a resident of Spain.
After acquiring residency⁣ in Spain, he never sells his cryptocurrencies stored in his own private wallet where he⁢ controls the private keys.
You mentioned that as long as he doesn't sell or transfer︀ away to a custodian account.

But then there is a requirement to declare wealth over︁ 2M.

Aren't these two in direct conflict?

 

[legrant]

It's two completely different things. The 2M one⁢ is the wealth tax and the other one is taxmen trying to know which cryptos︀ you have with new laws