What Is Modelo 721 in Spain?
Modelo 721 in Spain is an informative annual declaration for residents who hold cryptocurrencies or other virtual assets abroad.
It was first required for the 2023 holdings, with the filing window from 1 January to 31 March 2024. The model aims to provide transparency on foreign crypto holdings and prevent tax evasion.
Who Must File Modelo 721 in Spain?
The obligation applies to all Spanish tax residents:
- Individuals.
- Companies and permanent establishments of foreign entities.
- Entities without legal personality (such as undivided estates).
You must file if, on 31 December, your crypto holdings abroad exceed €50,000 in total value.
You must also file if you disposed of your crypto during the year, reporting data until the date of disposal.
In following years, you must file again if your holdings increase by more than €20,000 compared to the last filed declaration.
Who Is Exempt from Filing?
- Residents with foreign crypto assets worth under €50,000.
- Entities subject to Corporate Tax that record crypto assets in their accounting under the Spanish Commercial Code.
When Is the Deadline for Modelo 721 in Spain?
- The filing period is from 1 January to 31 March of the year following the fiscal year.
- For example: crypto holdings as of 31 December 2024 must be reported between 1 January and 31 March 2025.
- If technical issues arise, the deadline may be extended by up to 4 calendar days.
Key Aspects of Modelo 721
- Valuation: balances declared in euros as of 31 December, using the official exchange or average market value.
- Coverage: includes cryptocurrencies, stablecoins, and tokens held abroad.
- Custody: both hot wallets (online) and cold wallets (hardware) must be declared if the custodian is a foreign entity.
Penalties for Not Filing or Filing Incorrectly
The Spanish Tax Law sets heavy penalties for non-compliance:
- Minimum fine of €10,000 for not filing.
- Additional fines of €150 per incorrect item or €300 for late filing not required by the Tax Agency.
- Extra surcharges of €20 per omitted record if corrected upon request by the Tax Agency.
Frequently Asked Questions
Do I have to declare cold wallets abroad in Modelo 721?
Yes. Even if stored in hardware devices, if custody involves a foreign provider, they must be declared.
If I already filed last year, do I need to file again?
Only if your foreign crypto holdings increased by more than €20,000 or if you disposed of previously declared assets.
Does Modelo 721 generate taxes?
No. It is informative only, but failure to comply carries significant fines.
Understanding your obligations under Modelo 721 in Spain is crucial to avoid sanctions. Even though it does not generate direct taxes, it ensures transparency and compliance with anti-fraud measures. Staying on top of this obligation protects your assets and prevents unexpected penalties.
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