Form 721: the crypto-asset balance as of December 31 determines the obligation

The Directorate General of Taxes (DGT) has issued a relevant criterion regarding the determination of the obligation to report crypto-assets located abroad through Form 721. The inquiry focuses on identifying which balance must be used to establish whether a taxpayer is obliged to submit said informative declaration.

What the DGT has resolved

The body has determined that the obligation to file Form 721 is established based on the sum of the euro values of the balances of virtual currencies located abroad as of December 31. If the total value of this set of assets exceeds the threshold of 50,000 euros on that specific date, the taxpayer must report all of their virtual currencies held abroad.

A key point of the resolution is that any valuation variations that may have occurred throughout the fiscal year are irrelevant in determining the reporting obligation. The criterion is anchored exclusively in the wealth situation at the close of the year.

What this means for you

This criterion has a direct impact on various profiles of taxpayers resident in Spain:

• Individuals: Natural persons must monitor the value of their crypto-assets on foreign platforms at the end of the year. If the combined value exceeds 50,000 euros, the reporting obligation is total.
• Companies: Legal entities resident in Spain are also subject to this obligation if their balances abroad reach the established limit.
• Expatriates: Residents in Spain, regardless of their origin, must comply with this declaration if their balances meet the amount requirements.

What should be done

Given that the value of cryptocurrencies is highly volatile, it is necessary to perform precise monitoring of balances as of December 31. Compliance with this reporting obligation is based on the General Regulation of Tax Activities and the General Tax Law. It is fundamental to assess each particular situation to ensure that the declared information is correct and complies with the legal limits established by current regulations.