Spain Implements Stricter Cryptocurrency Reporting Requirements

With the implementation of new tax laws, Spain has taken a big step toward strengthening government control over bitcoin holdings. Residents are required to disclose any cryptocurrency assets they own on international platforms, according to a directive from the Spanish Tax Administration Agency, Agencia Tributaria. With this instruction, a new tax form, Form 721, has been created specifically for the purpose of reporting virtual assets that are held overseas.

The rules clearly outline the requirements for Spanish taxpayers, both individuals and corporations, forcing them to declare the value of their cryptocurrency holdings on overseas platforms as of December 31. For this declaration, the reporting period runs from January 1, 2024, to March 31, 2024.

Remarkably, the duty to declare bitcoin ownership extends to individuals whose holdings exceed €50,000. It is advised that those who have cryptocurrency assets kept in self-custodied wallets declare them using Form 714, the current wealth tax form.

Agencia Tributaria’s Vigilant Approach

This action is in line with the larger plan of Agencia Tributaria to improve the tracking and assessment of bitcoin holdings. The organization sent a startling 328,000 warnings to locals in April 2023 for failing to disclose their cryptocurrency holdings. Compared to the 150,000 warnings given in 2022, this was a significant rise. The spike in warnings is evidence of the agency’s increased efforts to guarantee tight adherence to cryptocurrency tax laws.

The Spanish Tax Administration Agency hopes to strengthen its enforcement and supervision powers in the cryptocurrency space by extending the reporting scope and establishing Form 721. This proactive approach not only highlights the significance of open financial practices but also points to a change in the direction of a more regulated and closely watched cryptocurrency landscape in Spain.