According to Odaily Planet Daily, a Spanish DeFi investor has been ordered by tax authorities to pay approximately $10.5 million in back taxes for using crypto assets as collateral for collateralized loans. The Spanish tax authorities classified the activity as a capital gain, even though the investor did not sell the assets or realize a profit.

The report states that the investor had previously declared all cryptocurrency transactions and paid $5.84 million in taxes, but three years later, tax authorities imposed tax on the use of assets as collateral to obtain loans through DeFi protocols. Tax advisors say this interpretation lacks economic and legal basis and contradicts the definition of capital gains in Spanish and EU law.

The Spanish tax authorities have controversially designated stablecoin loans and token transfers to DeFi protocols like Beefy or Tarot as taxable events. According to Article 33 of the Spanish Personal Income Tax Act, capital gains must reflect actual economic benefits and changes in net assets. (Cointelegraph)