In a move to regulate the taxation of virtual assets, Spanish residents with crypto holdings on non-Spanish platforms face a deadline of March 31, 2024 to declare their assets. The Spanish Tax Agency (AEAT) has introduced Form 721, a dedicated tax declaration form for virtual assets held abroad.

This development was initially announced in the Official State Gazette on July 29, 2023. Notably, it signifies a crucial step in enforcing tax compliance in the crypto space.

Submission Period Opens January 1, 2024

The submission period for Form 721 kicks off on January 1, 2024. This will provide individuals and corporations until the end of March to declare the amount of funds stored in their foreign crypto accounts as of December 31. This marks a critical period for those engaging in crypto transactions, requiring careful attention to compliance procedures.

Notably, only individuals with balance sheets surpassing the equivalent of 50,000 euros (approximately $55,000) in crypto assets are mandated to declare their foreign holdings. This targeted approach ensures that reporting obligations are focused on significant crypto holdings, streamlining the compliance process for smaller investors.

A screenshot of form 721

Individuals who store their assets in self-custodied wallets follow an alternative reporting path. They must disclose their holdings through the standard wealth tax form, Form 714. This dual approach caters to the diverse landscape of crypto storage methods, ensuring comprehensive reporting across different platforms.

AEAT’s Vigilance on Crypto Taxation

The AEAT has intensified efforts to monitor and enforce taxation on local holders of crypto assets. In April 2023, the agency issued 328,000 warning notices to individuals who failed to pay taxes on their crypto gains for the 2022 fiscal year.

This significantly represents a 40% annual increase, with a stark contrast from the 15,000 notifications in 2021. The proactive stance aims to bring transparency and accountability to the evolving crypto landscape.

Spain’s Regulatory Landscape

Spain continues to proactively shape its regulatory landscape for cryptocurrencies. In October, the Spanish Ministry of Economy and Digital Transformation announced the adoption of the Markets in Crypto-Assets (MiCA) Act. This being the first comprehensive European Union crypto framework.

Crypto assets

Spain plans to implement MiCA nationally in December 2025, six months ahead of the official EU deadline. This forward-thinking approach positions Spain at the forefront of crypto regulation within the European Union.

Further underlining Spain’s commitment to regulatory compliance, the National Securities Market Commission (CNMV) initiated its first case against a technology provider in November. The case revolves around the violation of crypto promotion rules in the country. This further highlights the authorities’ dedication to ensuring fair practices within the crypto industry.

Read More:

Standard Chartered Embraces China’s Digital Yuan Revolution

Richard Teng’s Vision: Binance To Evolve through Regulation