Spanish Tax Authority is Monitoring Bitcoin for Use in Illicit Activities

Spain is keeping an eye on cryptocurrencies to ensure they are not used for purposes such as money laundering.

May 23, 2014 at 1:25 p.m. UTC
Updated Sep 11, 2021 at 10:48 a.m. UTC

The Spanish tax authority, the Agencia Estatal de Administración Tributaria (AEAT), is "monitoring" digital currencies to ensure they are not used for illicit purposes such as money laundering and tax avoidance, the country's government has stated.

Perhaps more interestingly for bitcoin, the announcement indicated that digital currencies could be treated as cash, not commodities, for the purposes of taxation.

Watching bitcoin

According to a report on RTVE.es, the statement was made in response to the Socialist Treasury spokesman in Congress, Pedro Saura, who had requested clarification of the rules applying to the acquisition and use of digital currencies, such as bitcoin.

He had further asked whether the government had any plans to bring in specific legislation to prevent tax evasion through these emerging payment methods.

In his response, the government confirmed that the AEAT's National Bureau of Fraud Investigation will "monitor developments" within digital currencies to see if they "would jeopardize tax controls or be used in money laundering schemes or for other illicit purposes".

It was also pointed out that digital currencies are still a very young technology and their use is extremely restricted in Spain.

Cash not commodity?

Intriguingly, the government spokesperson seemed to indicate that bitcoin and other cryptocurrencies could be considered by the authorities to be forms of money and not commodities – unlike the US, which has taken the opposite stance and considers bitcoin to be property for the purposes of taxation.

The government spokesperson pointed out an existing regulation (article 34.2 of law 10/2010), which means that cash transactions, in which any of the parties is acting as either an employer or a professional, are not permitted in amounts greater than 2,500 euros or the equivalent in foreign currency .

This law is aimed to prevent money laundering and terrorist financing, they said, and includes payments by "any other physical means, including electronic, designed to be used as payment to the carrier."

The spokesperson indicated that if the monetary and financial authorities consider that bitcoin is a form of monetary payment, the same limitations would apply as with cash.

Community reactions

Speaking to CoinDesk, local bitcoin enthusiast Axel Roffi said the announcement could be "good news", adding:

"The thing is that the Spanish political class has absolutely no clue of what is happening and what bitcoin is all about. [...] I really think that bitcoin [should] have regulations at the European Union level."

Bitcoin being considered money would be welcomed by Spanish businesses and users, he continued, "but what would be a lot better is that bitcoin had more exposure in the news and more bitcoin evangelists that would go knock on the doors of small and medium businesses and expose the [advantages] of using bitcoin".

Amuda Goueli, CEO of Spain's first bitcoin-accepting travel agency Destinia, was more guarded about the news and confirmed that the status of bitcoin is still a grey area, saying:

"The Spanish government has yet to determine if bitcoin payments should be treated like cash payments, in which case there is a 2,500 euro limit for transactions within Spain. Since we don't know whether to apply this law or not, we have decided to play on the safe side."

"There has been no real change in the ambiguous legal status of bitcoins in Spain," he said. "The government has simply stated that they are 'watching' the flow of bitcoins to make sure that they are not used for money laundering and other crimes."

It is, however, good news the authorities have realised that bitcoins exist, Goueli indicated, explaining:

"When we asked one government department about bitcoins a few months ago, they didn't even know what they were!"

Disclaimer: Statements from the Spanish authorities are reported via an informal translation and have been edited for clarity. 

Spanish Congress image via Shutterstock


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