The Spanish Taxation Bureau requires cryptocurrency mining companies and individuals to register information and plans to issue further taxation guidelines

There is very little regulation on the cryptocurrency mining industry. Most countries have not yet introduced any regulations on this, but the Spanish tax authorities have defined Bitcoin and altcoin mining operations as economic activities. This new industry classification means that cryptocurrency mining companies will face taxation issues.

The Spanish National Tax Service (NDTS) recently issued an announcement requiring Bitcoin and altcoin mining companies (including individuals) to register information. Regardless of whether it is conducive to legalizing the cryptocurrency mining industry, this move by the tax office will definitely affect the income of mining companies. Therefore, it is likely to cause some miners to quit.

Spanish economist and tax consultant Jose Antonio Bravo Mateu estimates that mining operators may eventually need to pay profits taxes ranging 10%到47% . Mateu mentioned the potential advantages of this new taxation system to a Spanish cryptocurrency information website:

New regulations issued by the tax bureau define cryptocurrency mining as an以创造财富为目标的经济活动, so the mining community should apply for appropriate tax deductions for electricity consumption and mining equipment expenses as much as possible.

In order to maintain their mining profits, miners must constantly update their equipment. The continuous increase in mining difficulty will inevitably lead to increased power consumption. In this case, it is unclear whether various forms of tax relief will still be beneficial to ensure mining profits.

The Spanish government said that the new regulation was introduced to combat illegal digital currency activities. As the above policy is gradually implemented, the Spanish cryptocurrency community has also expressed concerns about whether this tax regulation will affect the innovation and development of blockchain technology.

In addition, the new taxation rules introduced by Spain are likely to affect other EU members or Latin American countries, and it is inevitable that some people will follow suit. Spain has always been very tolerant of the cryptocurrency economy and is the first European country to exempt cryptocurrency transactions from value-added tax (VAT). Whether this new taxation rule can guarantee its good reputation in the cryptocurrency community remains to be seen.