A Spanish DeFi investor faces €9 million ($10.5 million) in back taxes for securing a crypto-backed loan, as reported by Periodista Digital. Despite the investor having declared all previous cryptocurrency transactions and paid $5.84 million in taxes, Spanish authorities subsequently issued an additional tax bill. This bill was not for undeclared profits but for depositing assets into a DeFi protocol in exchange for a loan, even though no assets were sold and no profit was realized. A tax adviser criticized the local tax agency for taxing what is not income, noting that asset movements in the DeFi protocol were treated as realized gains, lacking legal basis. The Agencia Estatal de Administración Tributaria classified stablecoin loans as capital gains, which contradicts Spain's Personal Income Tax Law. This incident highlights ongoing issues within Spain's tax enforcement, where new regulations compel crypto users to declare foreign holdings by March 2024. Reports also indicate that the AEAT has access to user data to track compliance, raising concerns about fairness in the appeals process against agency errors.

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