A recent notice from the official taxation authority in Spain sees bitcoin mining fall under the purview of an economic activity, opening cryptocurrency mining to taxation.
Bitcoin and cryptocurrency miners in Spain will see taxation of their profits, a recent notice issued by the country’s National Directorate of Tax revealed.
First reported by Spanish industry publication CriptoNoticias, the new directive would require all cryptocurrency miners to register themselves with Spanish authorities before submitting taxes on mining-earned profits.
Citing reasons for the new tax measures, the report sees curbing money laundering, tax evasion and the ‘possible’ relation to cybercriminal activity and tools such as ransomware.
While the new tax rule sees the light of day in theory, there is the task of Spanish authorities plan on enforcing it to permissionless cryptocurrency miners beyond established or professional, large miners. Notably, the Spanish Ministry of Finance will be responsible for implementing the tax rule. The authority will reportedly hire bitcoin and cryptocurrency specialists, as well as training officials as a means to identifying all miners. Few details are known at this juncture.
Speaking to the publication as an expert in the matter, Jose Mateu, an economist and tax advisor revealed that the tax will be levied on a quarterly basis to begin with, before turning into a yearly tax collection.
He also sees miners facing taxes anywhere between 10% to 47%, from the profits of mined coins.
Spain is also among the notable members of the European Union lobbying to establish a regulatory framework for the largely permissionless cryptocurrency ecosystem, despite establishing bitcoin as a tax-free currency in sales transactions.
The newly imposed tax for cryptocurrency miners comes in the months after Spanish law enforcement seized six bitcoin mines that were allegedly used by a criminal network involved in the illegal distribution of pay-TV channels in the country.
Paying heed to Spain’s lead with the new taxation, other countries in Europe and could see the model as a precedent to impose their own taxes on miners. Latin American countries could also follow suit in a region where cryptocurrency miners see operations due to lower electricity and labor costs.
Images from iStock and Shutterstock.
Last modified: May 21, 2020 10:16 AM UTC