What are Forms 720 and 721, and who do they apply to?
Forms 720 and 721 are information returns which, as a general rule, must be completed by individuals or legal entities resident in Spain who hold assets, rights and/or virtual currencies located abroad.
The model also applies to permanent establishments in Spain maintained by non-resident individuals or entities, as well as unclaimed estates, joint ownership arrangements and other entities which, although lacking legal personality, constitute an economic unit or a separate estate subject to taxation.
Furthermore, it is important to bear in mind that the model applies not only to those who hold title to the assets, but also to those who act as representatives, authorised persons, beneficiaries, usufructuaries, policyholders, or who have the power of disposal or any other form of title in respect of the assets in question.
How long do I have to submit Forms 720 and 721?
The deadline for submitting both forms is 1 April 2024.
What is the threshold above which I would be required to file a tax return?
Generalmente, la obligación nace cuando el saldo global de un determinado bloque de bienes o derechos o monedas virtuales (*) supera los 50.000 €. Los referidos bloques de bienes, derechos y monedas virtuales serán analizados en los siguientes apartados.
Do I have to submit Form 720 every year?
The requirement to submit Form 720 must be reviewed each year.
Please note that, once Form 720 has been filed for the first time, you will only be required to file this return if any of the following circumstances apply in any of the four sections that determined the filing of the last return:
a) had increased by more than 20,000 euros.
b) The assets in respect of which there was an obligation to file a return in previous financial years are no longer held.
MODEL 720
‘Informative declaration regarding assets and rights located abroad’
What assets and rights must be declared on Form 720?
Form 720 requires the declaration of three different categories of assets and rights, provided they are located abroad:
a) Bank accounts, cash, credit accounts and deposits.
b) Securities, rights, temporary or life annuities, and insurance.
c) Immovable property and rights in rem in respect thereof.
Shall we go over the rules?
Con carácter general, no existe obligación de presentar la declaración cuando el conjunto de los bienes y derechos de cada uno de los tres bloques de bienes, individualmente considerado, no supere los 50.000 euros.
Consequently, you may be exempt from declaring assets in one category but required to do so in another.
When calculating the aforementioned limit, the total value of the assets must be taken into account, regardless of the share held by each liable party.
MODEL 721 (NEW)
‘Informative declaration regarding virtual currencies held abroad’
What assets and rights must be declared on Form 721?
Act 11/2021 of 9 July on measures to prevent and combat tax fraud has amended Act 58/2003 of 17 December, the General Tax Act, to introduce a new reporting obligation regarding the holding of and transactions in virtual currencies, commonly known as “CRYPTOCURRENCIES”, held abroad.
What does ‘located abroad’ mean?
“Virtual currencies” shall be deemed to be located abroad where they are held in custody by persons or entities not resident in Spain and which provide services to safeguard private cryptographic keys on behalf of third parties, for the purpose of holding, storing and transferring virtual currencies.
Shall we go over the rules?
You will be required to submit Form 721 if the total value (expressed in euros) of your cryptocurrencies held abroad exceeds €50,000 as at 31 December.
What information will be required?
In general, the following information will need to be provided:
- Status of the declarant: owner, authorised representative, beneficiary, representative, holder of power of disposal, or other forms of beneficial ownership.
- Type/Name of the virtual currency
- Acronym/Ticker symbol for the cryptocurrency
- Number of virtual coins as at 31 December
- Value/Exchange rate of the virtual currency as at 31 December
- Virtual currency balance
- Source of Value/Price: This field must indicate the trading platform or price-tracking website, or, where applicable, the source from which the price or value used to calculate the valuation in euros of the virtual currency unit was obtained.
- Details of the person or entity responsible for safeguarding the private cryptographic keys: the name or company name and address of the person or entity responsible for safeguarding the private cryptographic keys must be provided.
