Publicado: 13-01-2025
It is increasingly common in Spain to encounter individuals who, as residents in the country, hold assets and rights abroad. Globalization, particularly in economic and fiscal matters, has led the Spanish Tax Agency to seek greater control over such assets. As a result, Form 720 was introduced through Law 7/2012, dated October 29, requiring taxpayers to report assets and rights located outside Spain.
Subsequently, the Anti-Fraud Measures Law of 2021 introduced Form 721, establishing the obligation to declare cryptocurrencies held abroad.
Form 720 obliges taxpayers to report assets and rights located abroad. It must be completed by any taxpayer, whether an individual or a legal entity, residing in Spain, with limited exceptions. It does not differentiate based on nationality, location, or the time of acquisition of the assets.
Form 721, on the other hand, specifically targets cryptocurrencies, applying similar requirements. Both models serve a census purpose and aim to combat tax fraud by providing the tax authorities with access to information on such assets.
Both individuals and legal entities that are tax residents in Spain must file Form 720 if they own assets located abroad. Entities that have these assets properly recorded and identified in their accounts may be exempt.
For Form 721, the obligation applies to individuals and legal entities who own, are authorized users, or beneficiaries of cryptocurrencies held abroad with a minimum value of €50,000.
Spanish residents, including entities providing services for the safeguarding of cryptographic keys on behalf of third parties or managing, storing, and transferring virtual currencies, must file Forms 172 and 173, which cover respective balances and transactions.
Form 720 encompasses three categories of assets, each with a threshold of €50,000 to trigger the reporting obligation:
The obligation to file Form 720 arises when the total value of the assets in any category exceeds €50,000. If a previously declared category increases in value by more than €20,000, the information must also be updated.
For example, if an individual owns three properties abroad with a combined value of €51,000, they must declare them, regardless of the individual value of each property.
For cryptocurrencies, the annual obligation to declare under Form 721 is triggered when their combined value exceeds €50,000.
Once Form 720 or 721 is filed, it only needs to be filed again if the declared assets increase in value by €20,000 or more, or if new assets subject to reporting are acquired.
The deadline for filing Forms 720 and 721 is from January 1 to March 31. If the declaration is not submitted on time, the general penalty regime under the General Tax Law will apply, as automatic penalties were annulled by the Court of Justice of the European Union.
If you have foreign assets or cryptocurrencies and need assistance, our team of tax law specialists at Gentile Law is here to help. We’ll ensure your compliance with Form 720 and Form 721, addressing any questions and avoiding potential tax issues.
Lucía Goy Mastromiechele
luciagoy@gentile.law
+34 626 11 84 51
