In the cryptocurrency markets, legal regulatory measures continue to increase. Accordingly, the Spanish government has mandated that Spanish citizens must declare their crypto assets held in non-local cryptocurrency exchanges by March 31, 2024. This measure was taken by the Spanish government for the taxation of crypto assets.
Notable Details in the Tax Regulation
Known to the public as Agencia Tributaria, the Spanish Tax Agency announced the first step towards this measure on July 29, 2023, in the Boletín Oficial del Estado, the official state gazette of the Kingdom of Spain. Accordingly, the agency released a tax declaration form for crypto assets held abroad, known as Form 721.
The application period for Form 721 will officially start on January 1, 2024, and will end on March 31. According to this decision for individual and corporate taxpayers, the amount of funds held in crypto accounts abroad as of December 31, 2023, must be declared by the owners.
Obligation to declare applies only to individuals who exceed an amount of 50,000 euros in crypto assets. Individual investors who store their assets in cold wallets are also required to report their assets through the standard asset tax form 714.
Legal Regulations Continue in Spain
Agencia Tributaria has been notably increasing its efforts to collect taxes from crypto asset owners residing in the country. In April 2023, it issued 328,000 warning notices to those who did not pay crypto taxes for the 2022 fiscal year. The number of notices represented a 40% annual increase compared to 150,000 warnings in 2022. In 2021, only 15,000 notifications were sent in the country.
The country’s government prefers to act proactively with various legal regulations for its work related to the crypto market. In October, Spain’s Ministry of Economy and Digital Transformation announced that the first comprehensive European Union crypto framework, the Markets in Crypto-Assets Regulation, would come into effect in the country in December 2025, six months before the official publication date.
In November, Spain’s main financial regulator, the National Securities Market Commission, took a step in this direction by filing its first case against a technology provider for violating crypto market promotion rules.
- Spain tightens crypto asset declarations.
- Tax form 721 introduced for foreign-held assets.
- Agencia Tributaria steps up tax enforcement.