Due to the fact that Spanish law provides a high degree of protection for the rights of investors and consumers and that there were numerous cases of financial and securities fraud during the recession the Spanish government is very cautious and conservative about cryptocurrency. Cryptocurrencies cannot be treated as legal tender. According to this regulation, only banknotes and coins denominated in euros have legal tender status in Spain.
On February 8th 2018, the Bank of Spain and the Spanish Securities and Exchange Commission (CNMV) published a joint communication on the dangers of investing and trading in cryptocurrencies, emphasising that retail investors should avoid these investments. The communique does not contain a normative definition of cryptocurrencies, although it accurately describes concepts such as Initial Coin Offering (ICO) and Token by distinguishing between Security Token and Utility Token and by using Spanish terms that are easy to understand and accessible to the general public.
There is no specific regulation for cryptocurrencies in Spain. They are only not treated as legal tender, as this is exclusively reserved for the euro as the national currency.
According to Spanish law, virtual currency cannot be considered either as a financial instrument (promissory note, derivative, etc.) or as a currency (domestic or foreign). In some cases, however, they can be treated as securities in the case of a public offer, or as goods or commodities if they are traded individually.
To the extent that they can be regarded as securities, STOs may fall under the requirements of the prospectus file of the Spanish Stock Market Act (LMV), as the definition of financial instruments and tradable securities is very broad (Article 2 LMV). The Spanish Government may add new types of securities on its own initiative without the need to amend the law if agreed under EU law.
Regarding the blockchain technology, it is necessary to say that a technology which allows digital information to be distributed but not to be copied, will have many uses in the Spanish legal environment. For example, Spain notaries have a monopoly on certifying the authenticity of legal documents, so that blockchain platforms could be an alternative to notaries for the documentation of certain legal documents.
Sales Regulation and taxes
As far as cryptocurrencies are considered goods, they are traded according to the general rules of the Civil law and the Commercial law, in particular according to the rules that apply to the exchange contract. In principle, Spanish law requires a contractual agreement plus the delivery of the object so that ownership passes from the seller to the buyer.
Therefore, much depends on how Spanish law would characterize cryptocurrencies. In certain cases it can simply be categorized as an electronic product that is intangible and certainly similar to the information stored in the computer hardware.
There is, however, a regulation on the taxation of cryptocurrencies. Capital gains made from the sale of virtual currencies are taxed in a range of 19% - 23% (based on income). If purchased and sold within 12 months, the tax rate can vary between 24.75% and 52%. If the capital gains were generated by a company, a flat tax rate of 25% applies. It is currently assumed that the purchase and sale of Bitcoins is not subject to VAT.
The information provided in this blog post is for general information purposes only. The information was completed to the best of our knowledge and does not claim either correctness or accuracy. For detailed information on crypto regulations we recommend contacting a certified legal advisor in the specific country.
As this blog post refers to international crypto laws, the content will only be available in English. If any questions occur, feel free to contact us on [email protected]