Adoption of cryptocurrencies continues to increase in Spain, leading tax authorities to establish new regulations to ensure transparency and compliance in tax matters. In this context, Model 721 has become an indispensable tool for those who own virtual coins abroad. Taxpayers have until March 31, 2025 to submit this model for the 2024 fiscal year.
The legal basis for this obligation is found in Order HFP/886/2023, published in the Official State Gazette on July 29, 2023. This regulation establishes the conditions and procedures that must be followed for the submission of Model 721, creating a regulatory framework for the management of digital assets.
The obligation to submit Model 721 falls on all individuals and entities residing in Spain, as well as on the permanent establishments of non-resident entities that hold cryptocurrencies abroad. This includes beneficiaries, authorized persons, or those with disposal power over virtual coins.
The threshold that triggers the reporting obligation is a combined value of cryptocurrencies exceeding 50,000 euros on December 31 of the corresponding year. Subsequently, individuals will be required to re-submit the model in subsequent years only if the combined balance exceeds an increase of 20,000 euros compared to the previously declared amount.
Among the required data in Model 721 are the identification of virtual coins, their balance in euros on December 31, and information about the custodian entity. This data is crucial for the Tax Agency to monitor taxpayers’ digital assets and ensure compliance with their tax obligations.
The deadline for submitting the model is from January 1 to March 31 of the following year for which the information corresponds. Therefore, taxpayers must comply with the submission of Model 721 for the 2024 fiscal year within this period in 2025.
The submission is done electronically through the Tax Agency’s Electronic Headquarters. It is necessary to have a digital certificate or a Cl@ve PIN to access the service and complete the form.
Failure to meet this obligation can result in significant sanctions. Although specific regulations on sanctions are still in development, they are estimated to be similar to those applied in Model 720, which include high fines. Therefore, it is essential for all obligated parties to comply with this requirement to avoid possible penalties.
For entrepreneurs and business owners operating with cryptocurrencies, it is recommended to keep meticulous records of transactions, identify the precise location of assets, and seek specialized tax advice. The implementation of Model 721 underscores the commitment of Spanish tax authorities to transparency in the cryptocurrency field and proper handling of these assets.
Referrer: MiMub in Spanish