Spain Proposes 47% Crypto Tax While Japan Moves Toward Friendlier Regulatory Framework

Spain Eyes Sharp Tax Increase on Cryptocurrency

Spain's Sumar parliamentary group has introduced sweeping amendments to reform three major tax laws affecting cryptocurrencies, including the General Tax Law, Income Tax Law, and Inheritance and Gift Tax Law ^[1]. The proposal would fundamentally change how crypto profits are taxed in the country, shifting gains from non-financial-instrument assets into the general income tax bracket.

Under the proposed changes, the top tax rate for individual crypto investors would jump to 47% from the current 30% savings rate, while corporate holders would face a flat 30% tax ^[1]. Sumar, a left-wing political alliance holding 26 of the 350 seats in Spain's Congress of Deputies, serves as the junior partner in the governing coalition with the Socialist Party ^[1].

The plan includes additional controversial elements beyond taxation. The National Securities Market Commission (CNMV) would be required to create a visual "risk traffic light" system for cryptocurrencies to be displayed on investor platforms ^[1]. Perhaps most contentiously, the proposal would classify all cryptocurrencies as attachable assets eligible for seizure ^[1].

Critics Warn of Capital Flight

Economist and tax adviser José Antonio Bravo Mateu has denounced the amendments as "useless attacks against Bitcoin," arguing that the measures misunderstand how decentralized assets work ^[1]. He noted that Bitcoin held in self-custody cannot be seized or monitored in the same way as traditional financial assets.

"The only thing these measures achieve is to make its holders residing in Spain think about fleeing when BTC rises so high that they no longer care what politicians say," Bravo Mateu warned ^[1].

Meanwhile, tax inspectors Juan Faus and José María Gentil have suggested creating a special, more favorable tax regime specifically for Bitcoin, allowing taxpayers to separate wallets and apply either FIFO (first-in, first-out) or weighted-average methods ^[1].

Japan Takes Different Approach with Tax Reform

In stark contrast to Spain's proposed increases, Japan's Financial Services Agency (FSA) is pushing for tax reform that would dramatically reduce the burden on crypto investors ^[1]. Instead of taxing crypto earnings as "miscellaneous income" at rates that can reach 55%, Japan aims to apply a flat 20% capital gains tax, bringing digital assets in line with equities ^[1].

Japan Mandates Exchange Reserves Following Security Breaches

The FSA is also planning legislation to require crypto exchanges to maintain liability reserves to protect customers against hacks or security breaches ^[2]. According to a report by The Nikkei, the FSA plans to submit this legislation to parliament in 2026 ^[2].

The legislation would require crypto exchanges to meet requirements similar to those for securities firms, which currently hold reserves ranging from $12.7 million to $225 million, depending on trading volume ^[2]. Until now, exchanges were able to work around reserve requirements by storing customer assets in cold storage wallets ^[2].

To ease the financial burden, the FSA is considering allowing exchange platforms to purchase insurance rather than holding full cash reserves ^[2].

Series of Hacks Drives Regulatory Action

The planned mandate follows multiple security breaches targeting Japanese crypto exchanges. The most notable incident involved the now-defunct platform Mt. Gox, where hackers drained 850,000 BTC in 2014, pushing the exchange into bankruptcy ^[2]. Repayments only started a decade later and are now scheduled to run through October 2026 ^[2].

More recently, DMM Bitcoin lost 4,502 BTC valued at approximately $305 million in May last year ^[2]. In January, an estimated $21 million in Bitcoin and other cryptocurrencies was stolen from addresses linked to SBI Crypto, a mining pool owned by SBI Group ^[2].

According to on-chain analytics firm Chainalysis, Asia ranked second for Bitcoin thefts with a record-breaking number of digital heists ^[2]. Japan, Indonesia, and South Korea rank among the top countries for victim counts ^[2].