Local Publication Criptonoticias has announced that Spanish Authorities are interested in implementing a Tax on Cryptocurrency Miners in order to regulate Blockchain Technology more. Spain has been a cryptocurrency and fintech-friendly jurisdiction in recent years, there has been little Government intervention, however this is set to change as Authorities are keeping a close eye on these highly dynamic markets. Regulations concerning Cryptocurrencies minting are gradually falling in place, Spain may the first country to implement such hefty taxes on its Miner.
There is talks of 10-47% Tax for individuals who mine Digital Currencies, however note that Bitcoin, STEEM and other Alt-coins are still tax-free currencies when it comes to conducting sales transaction. This means that only those who engage in the process algorithmic mining via computing power are required to file for taxes.
While a lot of countries have yet to implement laws, the Spanish tax authorities have labeled Bitcoin and Alt-coin mining operations as an official economic activity. This new classification makes Cryptocurrency mining taxable.
Not only Spain, but generally the European Union has been actively trying over the past years to establish a regulatory framework, to be implement in hopes of regulating Decentralized Cryptocurrencies.
The latest notice, penned by the National Directorate of Taxes of Spain requires Bitcoin and Alt-coin mining companies, as well as individuals to register themselves in system. Failure to do so will have consequences and it's an expected practice to pay taxes. Government expects its citizen to respect the law or face punishment for illegal activity; not paying Taxes.
The Government motives for the new tax measures, is to curb money laundering, tax evasion and the ‘possible’ relation to cybercriminal activity. Recent events of individuals losing their Bitcoin or Alt-coins through exploits, hacks and fraud has raised concerns over legal obligations of the Government, thus authorities have clarified how the country's existing tax laws should be applied to losses incurred by the collapse of a Bitcoin or Alt-coins exchanges, the result of a scam or a situation of insolvency. By implementation a new Taxation scheme, considering that Mining Cryptocurrency is officially recognized as an economic activity, Governments will be more willing to provide more judicial security through law enforcement, thus Authorities can take legal action against individuals who engage with the Cryptocurrency Market.
Personal Opinion
I personally would not recommend taxing Miners, especially with a hefty tax which may make small scale mining unprofitable, since this economic activity helps secure self-regulating Networks which in return provides an infrastructure for Blockchain Technology. However the concern of Money Laundering, and legal aspects of Cryptocurrency raises a big concern, there is a rising trend in online theft & fraud associated to Cryptocurrencies. Personally would like to see more involvement from the Government against criminals who exploit Cryptocurrency markets this could be done by setting up a special task-force to monitor and investigate any unlawful acts, however taxing every civilian in the country who engages in crypto mining to me, is just another source of income for them. Spain may the first country, however if every country in the world starts to tax their miners, it could cause a new type of War; ''War on Miners'' , where any individual who mines without paying tax will be categorized as a criminals. Not only do Miners earn rewards but they essentially keep Crpytocurrency networks secure, if it's unprofitable for individuals to mine and there is risk of being punished by the law it will only make large scale mining facilities profitable! This makes easier for Government to monitor regulate the Crypto-market as there is less work to be done , there is still doubt on how Authorities will enforce taxes domestically.
For Mining to be a profitable activity, there is the constant need to upgrade equipment and with an increasing mining difficulty it will also lead to increased power consumption. In such a situation, whether these tax deductions will act in favor of profitable mining or not is a growing concern at the moment. However, you can expect the Government to begin regulating cryptocurrencies in order to earn some potential revenue while imposing laws to deal reduce and punish criminal activities. Government have yet to take action but It begins with taxing Miners!
The trick is to mine and to not have an exchange during the PoW stage and then swap to PoS.
The reason is that any mining done at that time will have no market value and can't be considered taxable.
Disclaimer: I am not a tax attorney, and these opinions should not be construed as tax advice.
It never a good time to tax in a free market in my view, I think people really need to see this though. Enforcement of taxation in our current system depends on violence. So you're paying for violence right out of the gate while hurting the free market economy. So it will never be a good time to tax minors and it will be to our advantage at large to struggle and resist it.
I'm thinking Spain won't have to worry about missing out on crypto mining taxes, because the miners will have gone missing.
"Let us just rename something to justify stealing half of someone else's income.
It's straight up idiotic. Australia is an overregulated country, but at least they don't have taxes on monetary trading activities. There is already, probably, a capital gains tax, similar to Australia, in Spain, and sure, if you even support the idea of taxation at all, then it certainly should not apply to speculative values of held assets, only when they are converted into cash. Otherwise you are killing the golden goose.
Obviously, this is spanish politicians trying to find ways to compensate for how badly they are strangling the national economy...
They should never tax Miners! Good Article!