Spain Implements Mandatory Reporting of Foreign Crypto Assets
spanish tax office, revenue, introduced groundbreaking requirements for residents holding cryptocurrencies on platforms outside of Spain. From January 1, 2024, individuals holding more than €50,000 in cryptocurrency assets abroad will be required to declare their holdings, aligning Spain’s rules with the EU’s broader financial directive.
Spain introduces cryptocurrency asset reporting requirements
This new guidance, published through the Boletín Oficial del Estado on July 29, 2023, marks a significant change in tax compliance measures by emphasizing the reporting of virtual assets held abroad. Form 721, dedicated to reporting virtual assets held by foreigners, obliges holders of high-value cryptocurrency to report their holdings by March 31, 2024.
Focus on high-value portfolios
However, this guideline specifically targets individuals with cryptocurrency holdings exceeding 50,000 euros (approximately $55,000). This move highlights a targeted approach to key investors in the digital currency space. Notably, individuals with self-custodial wallets are also reportable, but must report their holdings via the existing wealth tax Form 714.
In a notable effort to strengthen tax compliance, Agencia Tributaria has expanded its enforcement actions. The agency is stepping up its scrutiny of cryptocurrency imports announced in fiscal 2022, with alerts rising significantly to 328,000 in April 2023, compared to 150,000 in 2022 and 15,000 in 2021.
Also Read: A Look at DAC8: The EU’s Latest Cryptocurrency Tax Reporting Rules
Regulatory developments in Spain and EU coordination efforts
Spain’s proactive stance on cryptocurrency regulation aims to harmonize with the broader European Union’s directives. The country plans to adopt a regulated market for cryptocurrency assets by December 2025, six months before the EU’s official deadline. This proactive approach highlights Spain’s commitment to complying with EU standards in digital asset management.
In a recent regulatory milestone, Spain’s main financial regulator, the National Securities Market Commission, took decisive action against technology providers for violating cryptocurrency promotion rules. This strong enforcement highlights Spain’s commitment to creating a regulated and safe environment for digital asset trading and ensuring compliance and investor protection.