With the end of the first quarter of 2026, thousands of Spanish taxpayers will once again face the fiscal calendar of the State Administration of Tax Administration (AEAT).
This year’s tax procedures will once again include filing Form 721, which is used to report last year’s holdings of Bitcoin (BTC) and cryptocurrencies (outside of Spain). And one of the questions investors have is whether they should repeat the process of declaring assets abroad.
In that sense, technical regulations open a window of relief. Not everyone who applied in 2025 will need to apply in 2026.
According to AEAT guidelines, annual filing of Form 721 is not automatic. The regulation provides that the obligation will only survive if the joint balance of foreign virtual currencies in euro terms as of December 31 is: An increase of more than 20,000 euros Regarding the declaration submitted in 2024, it was supposed to be worth more than 50,000 euros in virtual currency.
This means that a fixed return is made to the Treasury. Updated only if there is a significant increase in assets.
Let’s say a Bitcoin user in Spain reports holdings worth €60,000 in 2025, and due to market fluctuations and modest purchases, his balance at the end of this year is €75,000. This year’s model announcements are exempt. Even if the position exceeds this amount at some point in 2025 and is again below the margin on December 31, the position should not be reported to the Treasury.
Form 721 is a mandatory information declaration in Spain and requires tax resident status. Details of virtual currency holdings overseas. That is, exchanges such as Binance, KuCoin, ByBit, Coinbase, etc. However, that will only happen if their joint value exceeds 50,000 euros. Additionally, digital assets and self-custodial cryptocurrencies stored on Spanish-registered exchanges will not be declared under this model.
This regulation was separated from the previous Model 720 and became effective in January 2024 (for fiscal year 2023 reporting). As reported by CriptoNoticias, the purpose is to give the Internal Revenue Service special control over foreign digital assets.
Need to declare Bitcoin liquidation and account closure
However, there are also scenarios where the value of Bitcoin and cryptocurrencies held on foreign exchanges takes a backseat. This is the extinguishment of ownership of those digital assets.
This means that Spanish Bitcoin and cryptocurrency users who sell all their assets, close their foreign exchange accounts, or transfer funds to self-custodial wallets by December 31, 2025. this must be reported In front of the Spanish Ministry of Finance.
AEAT takes a firm stance on this. This indicates that only the revocation of ownership of digital currencies that was the subject of a previous declaration needs to be declared.
Even in the case of immediate reinvestment, there are nuances in regulations. If ownership is extinguished due to the sale of an asset to purchase another asset also located overseas, Only the final balance as of December 31st needs to be declared.. This simplifies the process for active traders.
Sanctions apply if Form 721 is not filed
721 is an information model that does not involve the payment of direct taxes, unlike the Individual Income Tax (IRPF). Non-compliance has financial and legal consequences.
Sanctions for failure to file Form 721, incomplete filing, or missed deadlines Current prices are between 150 and 300 euros. This depends on the severity of the error and whether you correct the situation yourself before Treasury charges you.
Therefore, transparency is the best strategy for investors in digital assets. Economist Jesús Lorente, CEO of CL Cripto, a company specializing in cryptocurrency taxation, recalls this as being very important. Treasury wants to know these assets are no longer off the radar.
As March 31 approaches, users of platforms such as Binance, Kraken, and Coinbase will need to review their year-end returns and compare them with their 2025 returns to determine whether they have exceeded the €20,000 threshold or eliminated any positions that require reporting.
(Tag translation) Bitcoin (BTC)
