Spain Implements Mandatory Declaration for Foreign Crypto Assets
The Spanish Tax Administration Agency, Agencia Tributaria, has introduced a groundbreaking requirement for residents holding cryptocurrency on non-Spanish platforms. Commencing January 1, 2024, individuals possessing over €50,000 worth of crypto assets abroad are mandated to declare their holdings, aligning Spain’s regulations with the EU’s broader financial directives.
Introduction of Spain’s Crypto Asset Declaration Mandate
This new directive, announced via the Boletín Oficial del Estado on July 29, 2023, emphasizes the declaration of virtual assets held overseas, signalling a significant shift in tax compliance measures. Form 721, exclusively dedicated to reporting foreign-held virtual assets, imposes obligations on high-value cryptocurrency holders to declare their holdings by March 31, 2024.
Focus on High-Value Portfolios
However, the directive specifically targets individuals with cryptocurrency holdings exceeding 50,000 euros, roughly $55,000. This move emphasizes a targeted approach toward significant investors in the digital currency realm. Notably, individuals with self-custodied wallets are also subject to reporting but must declare their holdings through the conventional wealth tax form 714.
In a noteworthy effort to enhance tax compliance, the Agencia Tributaria escalated enforcement measures. With a substantial increase in warnings issued – 328,000 in April 2023 compared to 150,000 in 2022 and a mere 15,000 in 2021 – the agency is intensifying its scrutiny of crypto earnings declared for the fiscal year 2022.
Also Read: Navigating DAC8: The EU’s Latest Crypto Tax Reporting Rule
Spain’s Regulatory Advances and EU Alignment Efforts
Spain’s proactive stance on cryptocurrency regulation aims to synchronize with the broader European Union’s directives. By December 2025, the country plans to adopt the Markets in Crypto-Assets Regulation, aligning six months before the EU’s official deadline. This proactive approach underscores Spain’s commitment to adhering to EU standards in managing digital assets.
In recent regulatory milestones, Spain’s principal financial regulator, the National Securities Market Commission, took decisive action against a technology provider for violating crypto promotion regulations. This robust enforcement emphasizes Spain’s commitment to fostering a regulated and secure environment for digital asset transactions, ensuring compliance and investor protection.