With the growing number of crypto investors, governments worldwide have intensified their oversight of digital asset activities. In Spain’s 2022 income tax filing campaign—now serving as a reference point for future declarations—cryptocurrencies were reported in the same way as in 2021. This comes after the Ministry of Finance decided to delay until 2024 the requirement to report year-end crypto balances.
However, if current plans proceed as expected, starting with the 2023 tax year (filed in 2024), individuals will be required to disclose their cryptocurrency holdings. To better understand what this entails, insights from legal experts at Ceca Magán Abogados provide valuable clarity on compliance expectations.
Do Individuals Need to Report Their Cryptocurrencies?
Yes—under the self-assessment framework for the Wealth Tax (Impuesto sobre el Patrimonio), taxpayers must report the market value of all virtual currencies they hold as of December 31 each year. This applies to any person who owns digital assets directly, regardless of whether gains were realized during the year.
In Spanish Autonomous Communities where full Wealth Tax exemptions apply, this reporting serves an informational purpose only. However, it still contributes to national financial transparency efforts and may influence future audits or policy decisions.
Though not yet finalized, the upcoming Temporary Solidarity Wealth Tax (Impuesto Temporal de Solidaridad sobre Grandes Fortunas) is expected to treat cryptocurrencies similarly to how they're handled under the Wealth Tax. High-net-worth individuals should anticipate that digital assets will be included in net worth calculations for potential taxation.
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Moreover, the Spanish Tax Agency (AEAT) has consistently highlighted crypto-related risks in its annual tax control plans. These include tracking transactions through multiple data sources, such as exchange records and blockchain analytics, to detect underreporting or tax evasion.
What Reporting Obligations Apply to Wallets and Exchanges?
Cryptocurrency service providers operating in Spain face strict reporting duties under anti-money laundering (AML) and tax transparency regulations.
Wallet Providers
Wallet operators resident in Spain—or those with a permanent establishment in the country—are required to report detailed information about users, including:
- Full name or legal entity name
- Residential or registered address
- Tax identification number (NIF)
- Ownership status (holder, authorized user, or beneficiary)
- Year-end balance as of December 31
- Balance at the time of ownership change
This ensures authorities can trace asset movements and verify accurate valuation for tax purposes.
Cryptocurrency Exchanges
Spanish-based exchanges—or those with local operational presence—must report all transactional activity involving virtual currencies, including:
- Acquisitions, disposals, swaps, and transfers
- Payments and receipts made in crypto
- Full list of involved parties (names, addresses, NIFs)
- Type and quantity of cryptocurrency
- Transaction value in euros
- Date of execution
Such comprehensive reporting mirrors obligations seen in traditional financial systems and enhances regulatory oversight.
Importantly, entities that solely offer crypto advisory services, act as intermediaries connecting buyers and sellers, or process payment orders without custody of funds are not subject to these reporting requirements. The focus remains on platforms that control or facilitate direct movement of digital assets.
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Must Foreign-Based Cryptocurrencies Be Declared?
Starting in 2024, Spanish residents will be legally obligated to report foreign-held cryptocurrencies via Model 721, currently under development. This new form will require disclosure of any virtual assets held abroad at any point during 2023 if the individual:
- Is the legal or beneficial owner
- Has authorization or control rights
- Exercises disposal power over the assets
A cryptocurrency wallet is considered "located abroad" when its operator does not fall under Spain’s reporting jurisdiction—i.e., no Spanish residency or permanent establishment.
Valuation Rules for Crypto Holdings
To determine the euro value of reported cryptocurrencies, taxpayers must use one of the following methods:
- The average market price on December 31 provided by major trading platforms
- Reliable price-tracking websites (e.g., CoinMarketCap, CoinGecko)
- A reasonable market estimate if no clear pricing data exists
Additionally, filers must document and declare which source or methodology was used for valuation. This promotes consistency and supports audit readiness.
Frequently Asked Questions (FAQ)
Q: Do I need to report my crypto if I didn’t sell any in 2023?
A: Yes. Even if you held without trading, you may still need to report your year-end balance starting in 2024 under Model 721 and Wealth Tax rules.
Q: Are small crypto holdings exempt from reporting?
A: There is no minimum threshold—all foreign-held crypto must be reported regardless of amount. Domestic Wealth Tax thresholds vary by region but generally apply only above €700,000–€1 million in total net worth.
Q: What happens if I don’t report my crypto assets?
A: Non-compliance can lead to fines, interest charges, and potential criminal liability for tax fraud. The AEAT is actively using blockchain analysis tools to identify undeclared holdings.
Q: Can I use wallet app valuations for tax reporting?
A: You may use them as a reference, but official filings should rely on widely recognized pricing sources or documented fair market estimates.
Q: Does holding crypto on an international exchange count as foreign-based?
A: Yes—if the exchange or wallet provider isn't based in Spain or lacks a local presence, it qualifies as foreign-held and must be reported under Model 721.
Q: When will Model 721 become active?
A: Expected for submission in 2024, covering holdings from calendar year 2023.
As regulatory frameworks evolve, transparency around digital assets continues to grow. Whether you're a casual holder or active trader, understanding your tax obligations, reporting deadlines, and valuation methods is essential for compliance.
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