Spain’s Basque Country Readies its Own Crypto Tax Laws, Exchanges to Be Forced to Report on Clients

Source: Adobe/Fotokon

While central governments continue to hum and haw about the how, whens, and whys of crypto taxation and regulation, some provincial governments have decided to go it alone – particularly in the Basque Country, Spain.

El Indipendiente reported that all three of the Basque Country’s major Western provinces – Gipuzkoa, Biscay, and Álava – will attempt to “put a tax cap” on the “unregulated market” of crypto.

The first to do so is the government of Biscay, which has approved a “preliminary draft” of a local bill that would oblige firms providing “cryptocurrency buying and selling services” to provide the Biscayan Treasury and tax service with “detailed information” on “the balances” of crypto and fiat held by the owners of virtual currencies.” This would apply presumably to crypto owners residing in Biscay, and exchanges would also be obliged to hand over data on “the operations on said currencies” – i.e. transaction data.

The Biscayan government reportedly told El Independiente that the reporting burden would “fall on entities that facilitate crypto-related operations” and “not on the owner of the coins” – as exchanges and brokers “make possible” the holding and trading of [crypto-related] operations.”

The Biscayan parliament will vote on the proposed law. And if it is accepted, it will come into force on January 1, 2023. The bill’s authors were keen to point out that crypto owners were “not required to report” on their holdings – hinting perhaps that the Biscayan Treasury will carry out its own tax calculations based on the data it receives from exchanges and brokers.