Cryptocurrency Disclosure Mandate Hits Spain
Spain has introduced a new ruling that mandates its residents to disclose any cryptocurrency holdings they have on platforms based outside Spain.
The country’s Tax Administration Agency made this requirement official, set to be effective from January 1, 2024, with a deadline for disclosure by March 31, 2024. This announcement was initially publicized in the Boletín Oficial del Estado on July 29, 2023, outlining the introduction of a dedicated form (Form 721) for reporting virtual assets held overseas.
This regulation primarily targets a specific segment of individuals whose cryptocurrency holdings surpass 50,000 euros. This threshold, approximately equivalent to $55,000, is aimed at major investors engaged in digital currency transactions. Even individuals using self-managed wallets are not exempted and must disclose their holdings by means of the standard wealth tax form (Form 714).
The Tax Administration Agency has notably escalated efforts to ensure compliance with tax regulations among cryptocurrency holders. In April 2023, a considerable surge was observed in warning notices sent out – a total of 328,000 were issued to those who failed to report their crypto earnings for the fiscal year 2022.
This stark increase was significant compared to the 150,000 warnings issued in 2022 and the mere 15,000 notifications in 2021.
Spain is taking proactive steps towards cryptocurrency regulation, aligning itself with broader European Union guidelines in the management of digital assets. The Spanish Ministry of Economy and Digital Transformation has confirmed plans to adopt the comprehensive EU framework for crypto assets, the Markets in Crypto-Assets Regulation, by December 2025.
This proactive adoption, set six months ahead of the EU’s official deadline, demonstrates Spain’s commitment to harmonizing its practices with wider European standards.
Moreover, in a bid to enforce regulatory measures, Spain’s principal financial regulatory body, the National Securities Market Commission, recently initiated its first legal case against a technology provider for breaching regulations related to cryptocurrency promotion.
This initiative underscores Spain’s resolve to maintain a regulated and secure landscape for digital asset transactions within its jurisdiction.