The Spanish Ministry of Finance is moving forward with a new tax reform that would give it increased power to seize cryptocurrencies and non-fungible tokens (NFTs) in cases of tax non-compliance, as reported by the Spanish daily newspaper El Economista.

The proposed reforms to the General Tax Law, particularly Article 162, would authorize the local tax agency to confiscate crypto assets in the event of a taxpayer’s debt. Changes to the General Collection Regulations are also being considered to allow for the seizure of cryptocurrencies. The ministry already has access to information on taxpayers’ cryptocurrency holdings, and individuals and companies are now required to declare any crypto assets held abroad.

While the exact timeline for this initiative has not been disclosed, Spain has been at the forefront of implementing strict tax regulations on cryptocurrencies within Europe. Taxpayers must report profits or losses from crypto transactions in their personal income tax filings. Additionally, individuals with crypto assets exceeding €50,000 are obligated to declare them for wealth tax purposes by March of this year. Those holding crypto in self-custodial wallets can use Form 714 for declaration.

Previously, Spain’s tax regulator issued over 325,000 warnings to residents who failed to disclose their cryptocurrency holdings in 2023, a notable increase from the previous year’s 150,000 warnings.

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