- The Sumar party has proposed amendments to tax crypto gains as general income, raising rates to 47%.
- Economists warn this punitive measure will drive capital flight to tax-friendly jurisdictions.
- The proposal contrasts with recent moves to separate Bitcoin from broader crypto asset taxation.
Spain’s governing coalition is pushing for a drastic increase in cryptocurrency taxes. The Sumar parliamentary group has introduced amendments that would tax crypto profits at a top marginal rate of 47%. This proposal seeks to reclassify digital asset gains from “savings income” to “general income.”
This legislative move aligns with the European Union’s broader push for clarity under the Markets in Crypto Assets (MiCA) framework. However, analysts warn the specific tax hikes could damage Spain’s competitive standing.
Related: Stablecoins Remain Small in Euro Area, But Global Expansion Raises ECB Concerns
The Proposal: Reclassifying Crypto as General Income
Currently, crypto gains in Spain are taxed as savings. This structure caps the tax rate at 28% for most investors, rising to 30% for the highest earners.
The new amendment would strip this classification. Instead, profits would be taxed as general income, pushing the top rate to 47% for high-net-worth individuals. Additionally, the proposal seeks to tax corporate crypto profits at a flat 30% rate.
Beyond tax hikes, the amendments require the CNMV (Spain’s securities regulator) to establish specific risk classifications for crypto assets. This would add another layer of compliance for local investors.
Economist Warns of Capital Flight: ‘Investors Will Flee’
Market reaction has been swift and critical. Economist José Antonio Bravo Mateu warned this strategy will backfire. He noted that self-custody wallets allow investors to hold assets outside immediate government reach. If the tax burden becomes punitive, he argues, wealthy holders will simply relocate.
“The only thing these measures achieve is to make holders residing in Spain think about fleeing when BTC rises so much that they do not care what the politicians say,” Mateu noted.
The Global Context: Spain vs. Tax-Free Hubs
This proposal places Spain in stark contrast to jurisdictions aggressively courting crypto capital. Countries like the United Arab Emirates (UAE) and El Salvador offer 0% capital gains tax on digital assets. Even within Europe, nations like Germany offer tax-free exits for long-term holders.
According to Chris Carrascosa, a lawyer focused on digital assets and fintechs, the proposals will only create chaos for the crypto tax regime in Spain if approved. Meanwhile, some other tax experts in the country have been proposing a reduction in crypto taxes.
A recent proposal by two tax inspectors, Juan Faus and José María Gentil, seeks to separate Bitcoin taxation from the wider crypto assets. However, the ultimate decision will still be made by the country’s parliament, which is currently heavily divided.
Related: BBVA Pushes Crypto Adoption, Advises 3–7% Portfolio Allocation in Digital Assets
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Source: https://coinedition.com/crypto-investors-in-spain-face-47-tax-bill-under-new-plans/
