A crypto investor, who had dutifully declared income and paid about €5 million ($5.84 млн) in taxes, received a new demand from the Spanish tax agency (AEAT) for €9 million ($10.52 млн). The basis was the use of a DeFi protocol, without generating profit or converting assets.
In spring 2025, it became known about a case in which AEAT imposed millions of euros in additional taxes on a trader who had placed his crypto assets as collateral in a DeFi protocol. The owner did not sell tokens and did not lock in any profit – he only received a loan secured by them. However, AEAT classified this operation as a disposal of capital and taxed it as capital gains.
According to his legal representative, taxation was applied to a technical movement of assets within the protocol, which neither changed ownership nor created economic benefit. They refer to Article 33 of the Spanish Personal Income Tax law, which states that capital gains arise only from an actual increase in wealth.
What AEAT Considers a Taxable Event
AEAT recognized even non-withdrawn tokens and loans in stablecoins as income. Among other things, interactions with protocols like Beefy and Tarot were named taxable actions. Although these activities involve neither capital appreciation nor actual asset disposal, AEAT insists on tax payment.
Lawyers call the situation systemic. According to them, the sector lacks clear rules for digital assets, and the appeals mechanism is directly subordinated to the Ministry of Finance. TEAC (Tribunal Económico-Administrativo Central), where first appeals are filed, is not considered an independent court. Its staff are appointed by the government and are not separated from the tax authority whose decisions they must review.
Enforcement Before Litigation
Lawyers note that even when an appeal is filed, AEAT has the right to begin immediate enforcement: freeze accounts, seize property, or notify of debt through digital channels. At the same time, enforcement suspension is possible only after full payment of the amount or with a bank guarantee. Courts do not participate at this stage.
The timeframes for dispute resolution also raise concern. Cases in TEAC last from 26 to 54 months, while cross-border disputes can take up to 8 years. During all this time, assets may remain frozen.
Even if the case ultimately resolves in favor of the taxpayer, by that time the business may be destroyed and reputation undermined.
Problem Recognized at the EU Level
In 2025, the European Commission recorded a violation of fundamental principles of justice in Spain’s tax system. In its rule of law report, it mentions TEAC’s dependence on the government, lengthy delays, and lack of mechanisms to protect rights. The organization Liberties emphasized that such a situation contradicts Article 6 of the European Convention on Human Rights.
Amid growing crypto assets, this creates a special risk zone for investors and developers. While in France and Germany filing a complaint automatically suspends enforcement, and in Estonia there is a presumption of good faith, in Spain protection of rights is available only to those who can afford to pay multimillion-euro claims in advance.
Beckham Law and Double Standards
The contrast is particularly visible against the background of the Beckham Law – a tax regime under which foreign football players paid tax only on income earned in Spain. In 2023, it was extended to technology specialists and entrepreneurs, but crypto investors were not included in the list of beneficiaries.
Lawyers at Lullius Partners stress that clear rules for taxation of tokenized assets and DeFi operations still do not exist. As a result, investors face arbitrary interpretation and disproportionate tax burdens.
Violation of Fundamental Guarantees
In Spanish practice, funds can be seized before a case is considered on the merits. The absence of an independent arbiter at the first stage, the impossibility of suspending enforcement without collateral, and the dependence of the appeals body on the same structure that issues decisions – all this casts doubt on the observance of fundamental rights, experts note.
As the statement emphasizes, in such a situation tax ceases to be a tool of balanced budgeting and becomes a means of pressure, shifting the focus from the question of amount to the question of trust – in law, in the state, and in the court.
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