The Spanish Tax Administration has introduced new regulations governing the taxation of virtual assets, requiring Spanish residents who hold any crypto assets on non-Spanish platforms to disclose them by March 31, 2024.
To facilitate this declaration, the Tax Administration released Form 721, specifically designated for reporting offshore virtual assets. This form was initially published on July 29, 2023, in the Boletín Oficial del Estado, Spain's official gazette.
The time frame for filing Form 721 statements begins on January 1, 2024, and concludes on the last day of March. By December 31, 2023, both individual and corporate taxpayers are mandated to declare the funds held in their offshore cryptocurrency accounts.
However, the obligation to report offshore assets applies solely to individuals possessing over €50,000 (approximately $55,000) in crypto assets on their balance sheets. Individuals who store their assets in self-custodial wallets are required to report these holdings using the standard wealth tax form 714. The Tax Administration has notably escalated its efforts to scrutinize local crypto asset holders. In April 2023, it issued 328,000 warning notices to individuals who had not paid their crypto taxes for the fiscal year 2022—an increase of 40% from the previous year's 150,000 warnings and a substantial jump from 2021's 15,000 notices.
Spain is actively adopting various regulatory measures to manage the realm of cryptocurrencies. In October, the Ministry of Economy and Digital Transformation reported the upcoming implementation of the Regulation of Markets in Crypto-Assets, the EU's first comprehensive crypto framework, nationally by December 2025—six months earlier than the official deadline.
Additionally, the National Securities Market Commission, Spain's primary financial regulator, initiated a case last November against a technology provider for allegedly violating rules regarding the promotion of cryptocurrencies.
