Modelo 721

Imagine you have a safe with crypto in it, but that safe sits on a platform in another country. The tax authority wants to know you hold it, even though it does not charge you anything just for reporting it. That is what Modelo 721 is for: a form on which you declare which cryptocurrencies you keep outside Spain.

Note: it is not a tax, it is just “filing a report.” You only have to submit it if the total you hold abroad exceeds 50,000 euros as of 31 December. And it is filed in the first three months of the following year, just like when you report holding a bank account abroad.

Modelo 721 is the “Informational return on virtual currencies located abroad,” approved by Order HFP/886/2023, of 26 July. It stems from the obligation introduced by Ley 11/2021 on measures to prevent and combat tax fraud and is set out in Article 42 quater of the General Regulation on tax management and inspection actions and procedures.

It is a purely informational obligation (not a payment obligation) that falls on resident individuals and entities that are holders, authorised parties or beneficiaries of virtual currencies held in custody by third parties abroad. The obligation to file arises when the aggregate balance as of 31 December exceeds 50,000 euros; in subsequent years it must be filed again only if the balance increases by more than 20,000 euros. The filing period runs from 1 January to 31 March of the following year, and the first campaign corresponded to the 2023 tax year. It should not be confused with Modelo 720 (assets and rights abroad), which does not cover crypto-assets.