Modelo 721 is a Spanish informative tax declaration for fiscal residents who hold crypto-assets or virtual currencies in custody with third parties located outside Spain, when the aggregate value exceeds the statutory threshold. It complements Modelo 720 with a dedicated regime for digital assets. No tax payment is due on filing, but failure to declare can trigger penalties.
In practice
What Is Modelo 721?
Modelo 721 is a Spanish informative declaration — not a tax payment form — requiring Spanish tax residents to report to the Agencia Tributaria the existence of virtual currencies and crypto-assets held in custody with third parties located outside Spain, when their value exceeds the threshold established by applicable regulations.
The declaration was created as part of the information reporting package introduced by Law 11/2021 (the anti-fraud tax law), which extended foreign asset disclosure obligations to digital assets. As with Modelo 720, filing Modelo 721 does not itself trigger a tax payment, but failure to comply or filing with incorrect or incomplete data can expose the taxpayer to penalties from AEAT.
Which Assets Are In Scope
Modelo 721 covers virtual currencies and crypto-assets held through custodians or service providers outside Spain. The central criterion is third-party custody: a crypto exchange, a digital asset investment platform, or any other entity holding cryptographic keys on the taxpayer’s behalf, where that entity is located abroad.
Out of scope:
- Crypto-assets held in the taxpayer’s own wallets (self-custody or hardware wallets), which are subject to a separate reporting regime
- Crypto-assets held in Spain by Spanish-registered entities or platforms
Filing Timeline and First Application Year
The declaration covers assets held as of 31 December and is filed in the 1 January to 31 March window of the following year. Modelo 721 was first applied to the 2023 tax year, with initial filings due in early 2024.
In subsequent years, analogously to Modelo 720, the obligation to re-file may be reduced when there are no significant changes relative to the previous declaration, but the specific update rules in force for each year should be verified.
How Modelo 721 Relates to Modelo 720
Modelo 720 covers traditional foreign assets: bank accounts, securities, and real estate. Modelo 721 extends that same disclosure logic to virtual assets, which do not fit the asset categories defined for Modelo 720. Both declarations coexist, and a taxpayer can be required to file both.
With the entry into force of DAC8 (Directive 2023/2226/EU), crypto-asset service providers will also report transaction data directly to EU tax authorities, creating an information flow that complements Modelo 721 and enhances AEAT’s detection capability.
Beckham Regime Interaction
Taxpayers benefiting from Spain’s special expat tax regime (Article 93 LIRPF, commonly called the Beckham Law) have reduced foreign asset disclosure obligations during the period of the regime, as they are taxed on a non-resident basis for most income sources. However, the interaction between the Beckham regime and Modelo 721 should be assessed on a case-by-case basis, particularly for those holding crypto-assets through foreign custodians.
Practical Considerations
For Spanish tax residents holding crypto-assets on foreign exchanges, Modelo 721 is an annual compliance obligation requiring forward planning. Key preparation steps include valuing assets as of 31 December, identifying which custodians are located outside Spain, and correctly categorising the assets in scope.