Spain Mandates Crypto Asset Disclosure for Citizens and Businesses Starting 2024
A New Era of Crypto Regulation in Spain
Spain is setting a new precedent in cryptocurrency regulation with its latest tax laws. Starting in 2024, Spanish residents will be required to report all their cryptocurrency assets held outside the country through a new tax form, known as “Modelo 721. Declaración informativa sobre monedas virtuales situadas en el extranjero”. This move signifies a significant step towards tightening the regulatory grip on virtual assets.
Further reading：EU Proposes Strict KYC for Crypto Transactions Under €1,000 to Combat Small-Scale Terror Funding
Understanding Modelo 721: The New Compliance Requirement
Published in the ‘Boletín Oficial del Estado’ on July 29, 2023, Modelo 721 is specifically designed for Spanish taxpayers to declare their foreign-held crypto assets. This development reflects Spain’s commitment to integrating cryptocurrency into its formal financial and regulatory framework.
Deadline for Crypto Asset Reporting
According to the official announcement, the submission window for Modelo 721 will open on January 1, 2024, and close on March 31, 2024. This requirement applies to both individuals and businesses, with an obligation to report the total amount of funds in foreign cryptocurrency accounts.
Exemptions and Thresholds
The Spanish tax authorities have clarified that Modelo 721 is applicable to those with crypto assets exceeding 50,000 euros (approximately $55,000). However, citizens who do not meet this criterion and store assets in self-custodial wallets must report their assets through the “Spanish Standard Wealth Tax Form (714).”
Increasing Scrutiny on Crypto Taxation in Spain
Spain has been progressively tightening its crypto regulations, especially in taxation. In April this year, the Spanish Tax Agency issued warnings to 328,000 individuals who had not paid their crypto taxes for the fiscal year 2022. This number has seen a significant increase from 150,000 in 2022 and 15,000 in 2021.
Broader Regulatory Moves in Spain
The Spanish Ministry of Economic Affairs and Digital Transformation announced in October that Spain would implement the European Union’s first comprehensive crypto regulatory law, the Markets in Crypto Assets regulation bill (MiCA), by December 2025. This implementation is set to occur six months earlier than the EU’s proposed timeline.
Spain Paving the Way for Crypto Regulation
Spain’s move to mandate the declaration of foreign-held crypto assets is a clear indication of the country’s proactive approach to regulating the burgeoning cryptocurrency market. With these regulations, Spain aims to ensure transparency and legal compliance in the crypto sector, setting an example for other countries to follow.
Keywords: Spain, cryptocurrency regulation, Modelo 721, Spanish Tax Agency, crypto assets, virtual assets, tax compliance, crypto taxation, Boletín Oficial del Estado, MiCA, financial regulation
