Informative declaration on virtual currencies located abroad. Tax form 721.

Form 721 is an informative tax document stemming from the reform of Spanish Tax Laws concerning anti-fraud measures in July 2021. This revision has extended the form’s applicability to encompass cryptocurrencies held overseas.

Per the reform, individuals possessing cryptocurrency with a portfolio value exceeding €50,000 must file Form 721 between January 1 and March 31. However, the implementation of this requirement commences with the 2023 tax year. This implies that the inaugural year demanding the submission of the 721 declarations under the specified conditions is 2024. The official version of the Model 721 form tailored for the 2024 tax deadline is yet to be unveiled.

To ascertain the value of your cryptocurrency holdings, you’ll need to compute the average price as of December 31 in each fiscal year. In instances where investors held more than €50,000 at any point within the fiscal year but did not retain that sum by December 31, details about the date when your cryptocurrency portfolio’s value dropped below this threshold must be furnished.

Investors subject to Form 721 requirements who fail to meet the submission deadline will be subject to a penalty of €200. Similarly, investors who submit Form 721 with inaccuracies will incur a penalty of €150.