Spain’s aggressive crypto-tax

Spain’s aggressive taxes on cryptocurrency transactions have been criticized by legal experts, EU watchdogs and investors.

A recent case revealed how a compliant investor, who had already paid €5 million in taxes, was hit three years later with a further €9 million assessment, despite not having sold any assets or made a profit.

Taxation of crypto loans as gains

The Spanish Tax Agency (AEAT) classified simple movements of tokens into decentralised finance (DeFi) protocols – such as using stablecoins for loans or staking tokens – as taxable events. According to the investor’s lawyer, “The AEAT taxed something which, from an economic or legal standpoint, is not income.” (cited by Periodista Digital). “It involved a simple technical transfer of assets, within the DeFi protocol. There was no gain, and there was no change of ownership. No profit was made.” The AEAT said it was a capital realisation, which is not supported by current Spanish and European law.

In Article 33, the Personal Income Tax Law of Spain, capital gains require a real increase in wealth. The AEAT’s interpretation is criticized by critics as going beyond Spanish and European law.

Spanish court system under fire

The Spanish Central Economic and Administrative Court, which is directly responsible to the Ministry of Finance, will first hear appeals against these rulings.

Taxpayers must You must pay or provide guarantees in advance before you can appeal.. In the interim, AEAT has the power to freeze bank accounts or digital wallets. It can take several years to appeal. Even if the investors win in the end, their business may be irreparably damaged.

The Year 2025 Report on State of Freedoms and Rule of Law Spain’s tax system has been criticized by critics citing delays, independency, and the risk of fair trials. Liberties is a civil rights organization that warned against such practices as they violated Article 6 of the European Convention on Human Rights.

The European Commission began exploring reforms that would harmonise the tax procedures in the entire bloc. Spain’s reputation as a high risk environment for digital assets investors could be cemented until then.

What is the “reverse Beckham Law?”

Spain’s selective tax incentives highlight its contradictions. The so-called Beckham Law, reintroduced 2023 offers tax breaks for foreign tech professionals. Even when there is no profit, crypto investors still face heavy-handed regulation.

Lullius Partners stated that “Spanish tax law still lacks clarity on how cryptocurrency holdings and tokenised assets are taxed.” (Cited By Periodista Digital.)

A two-tiered tax system is unfair because it allows one group to benefit from exemptions and another group to face unpredictable tax burdens. It undermines principles of neutrality, fairness, and equality.

Critics say that the real problem is not taxation, but rather trust in Spain’s legal system. It’s concerning that Spain has turned tax enforcement into an instrument of coercion by putting enforcement before appeals.

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