Spain Mandates Crypto Asset Reporting by March 31, 2024

In a decisive step to bolster control over cryptocurrency taxation, Spain’s Agencia Tributaria has introduced Form 721, a dedicated declaration for virtual assets held on non-Spanish platforms. The regulation requires all legal residents and citizens to officially report their foreign crypto holdings for tax purposes. The declaration window runs from January 1, 2024, to April 1, 2024, with the reporting obligation specifically tied to the value of assets held as of December 31, 2023.

The mandate applies a clear financial threshold: only individuals and businesses with crypto assets abroad exceeding $55,000 on their balance sheets are obligated to file Form 721. This threshold establishes a focus on significant holdings, allowing the tax authority to prioritize its compliance efforts while acknowledging smaller, retail investors. The regulation also demonstrates a nuanced approach to the diverse nature of crypto custody. For those utilizing self-custodial wallets, the declaration must be made through the standard wealth tax Form 714, adapting the reporting requirement to different storage methods without creating a regulatory loophole.

The introduction of Form 721 is not an isolated action but part of a broader, intensifying crackdown on crypto tax evasion by the Agencia Tributaria. The scale of this effort is underscored by the 328,000 warning notices the agency sent in April 2023 to individuals who had failed to pay taxes on cryptocurrency for the 2022 fiscal year. This figure represents a striking 40% increase in enforcement actions compared to the previous year, signaling a clear shift from advisory warnings to active compliance pressure.

This proactive stance follows public statements from Spain’s main financial authority denouncing fraudulent cryptocurrency promotions and emphasizing the necessity for businesses to adhere to local regulations. The coordinated message from different arms of the Spanish government highlights a unified front in bringing the burgeoning crypto market under a regulated umbrella. The enforcement data and the new reporting mandate together paint a picture of a jurisdiction moving decisively to close gaps in its tax net and assert authority over digital asset transactions conducted beyond its immediate borders.

Spain’s domestic regulatory push is strategically aligned with, and in some aspects ahead of, broader European Union initiatives. According to the Spanish Ministry of Economy and Digital Transformation, Spain plans to enforce the EU’s landmark Markets in Crypto-Assets Regulation (MiCA) nationally in December 2025. This implementation would occur a full six months before the official EU deadline of June 2026, positioning Spain as an early adopter committed to a harmonized regulatory framework.

This accelerated timeline for MiCA, coupled with the aggressive enforcement of existing tax rules, underscores Spain’s dedication to creating a robust regulatory environment. The nation is actively working to stay ahead of the curve in governing the rapidly evolving crypto landscape within its borders. By mandating detailed foreign asset reporting now and preparing for comprehensive EU rules, Spain is seeking to mitigate risks associated with tax evasion and market instability while providing clearer rules for businesses and investors operating in EUR and other currencies within its jurisdiction.