Modelo 721: Reporting foreign crypto assets in Spain

Anyone who is tax resident in Mallorca and holds Bitcoin, Ethereum or other crypto assets on a foreign exchange such as Binance, Kraken or Coinbase can no longer avoid the Modelo 721 since the 2023 tax year. This information return was split off from the older Modelo 720 and applies exclusively to virtual currencies held abroad – provided their total value exceeds the threshold of 50.000 euros on 31 December. In this guide you'll learn exactly who is subject to the reporting obligation, how the threshold is calculated, what role the place of custody (exchange vs. own wallet) plays, when you must report again in subsequent years, and what happens if you fail to comply. Important: the Modelo 721 does not itself trigger any tax – it is a pure transparency obligation towards the Agencia Tributaria.

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What is the Modelo 721?

The Modelo 721 (officially: Declaración informativa sobre monedas virtuales situadas en el extranjero) is an annual, purely informational declaration for tax residents in Spain. It came about because the legislator, with the Ley 11/2021 de medidas de prevención y lucha contra el fraude fiscal, separated virtual currencies out of the general pool of foreign assets (Modelo 720) and created a distinct, technically differentiated reporting obligation. It was first mandatory for holdings as of 31 December 2023, to be filed between 1 January and 31 March 2024.

The declaration itself does not result in any immediate tax payment. It serves the Agencia Tributaria (AEAT) to make crypto holdings abroad visible and to cross-check them against the details given in the income tax return (Modelo 100/IRPF).

Note: Modelo 720 and Modelo 721 are two separate forms with separate thresholds. Anyone who holds both a German securities account and crypto on Binance must check both forms separately.

Who must file Modelo 721?

Reporting obligations apply to natural persons, companies and entities without their own legal personality (such as undivided communities of heirs) who are tax resident in Spain. As a rule, you are considered tax resident if you spend more than 183 days a year in Spain or if your centre of economic interests is located there. You can find details on determining tax residency in our guide to the 183-day rule.

The reporting obligation applies when two conditions are met simultaneously:

1. Tax residence in Spain.
2. Total value of all crypto assets on foreign platforms exceeds 50,000 euros as at 31 December.

You must report not only full ownership, but also cases where you act as beneficiary, authorised representative, or person with power of disposal over the assets.

Caution for married couples with community property: If the Spanish régimen de gananciales or a comparable German marital property regime applies to your assets, each spouse must report the full total value once the threshold is exceeded – not just their own share.

The €50,000 threshold in detail

For the calculation, the euro value of allvirtual currencies on foreign platforms as at 31 December of the tax year are added together. Valuation is generally based on the exchange rate of leading liquidity aggregators on that reference date. If the total is exactly 49,999 euros, no obligation arises. If it exceeds 50,000 euros by even one cent, the declaration becomes mandatory.

Importantly: the threshold refers to the total value across all platforms and coins combined, not to individual positions. Anyone holding 30,000 euros in Bitcoin on Binance and 25,000 euros in Ethereum on Kraken reaches a combined total of 55,000 euros and is subject to the reporting obligation – even though no single position alone exceeds the limit.

Own wallet vs. exchange: where does the reporting obligation lie?

The decisive factor for Modelo 721 is the control over the cryptographic access keys. The AEAT strictly distinguishes between centralised platforms (custodial exchanges) and decentralised solutions, where you hold the private keys yourself.

• Custody on a foreign exchange (custodial): The platform controls the access keys, and you only have a claim against the provider. This counts as "held abroad" and falls under the reporting obligation once the threshold is exceeded.
• Self-custody (hardware/cold wallet): If you hold the private keys yourself, the values are generally not considered to be held abroad and therefore do not need to be reported via Modelo 721 – regardless of value.

Note: An incorrect classification of the place of custody is one of the most common triggers for enquiries from the AEAT. Anyone unsure whether a platform counts as "foreign" within the meaning of the regulation should clarify this with a tax advisor before filing.

What information is required?

For the initial declaration and for every subsequent declaration, the following data must be available for each reportable position:

1. Name and country of domicile of the crypto platform (exchange).
2. Public wallet addresses.
3. Type of virtual asset (e.g. Bitcoin, Ethereum, other tokens).
4. Amount held as at 31 December.
5. Euro value as at 31 December, determined using the rates from common liquidity aggregators.

Individual transactions or trading gains do not need to be listed in the Modelo 721 itself not – it concerns solely the holdings as at the reporting date. Realised gains belong in the income tax return.

Deadlines and submission

The Modelo 721 is filed exclusively electronically via the Sede Electrónica of the Agencia Tributaria. The filing window runs every year from 1 January to 31 March and relates to the holdings as at 31 December of the previous year.

Attention: If you lose your Spanish tax residency during the course of the year or close a foreign account, you must still report it if the balance at the time of closure exceeded the threshold – the figures must then be given as at the date of disposal.

Subsequent years: When do I need to report again?

Unlike a one-off initial declaration, the Modelo 721 is not automatically mandatory again in subsequent years. A new declaration is only triggered when certain changes occur:

Modelo 721 and income tax – how are they connected?

The Modelo 721 is a pure transparency obligation and does not replace the taxation of crypto gains. Under Spanish law (Ley 35/2006, IRPF), crypto transactions are subject to income tax: capital gains are allocated to the savings tax base and taxed progressively at 19–30% (up to €6,000 at 19%, up to €50,000 at 21%, up to €200,000 at 23%, up to €300,000 at 27%, above that 30% — Ley 7/2024, effective from 01.01.2025). Every sale, exchange or even a crypto-to-crypto swap counts as a taxable event and must be calculated using the FIFO method, which is mandatory in Spain. Anyone declaring crypto assets should therefore also check in parallel whether realised gains have been correctly recorded in the income tax return. You can find the basics on income tax in Spain in our guide on IRPF deductions in the Balearics.

Penalties and risks for non-submission

The original penalty regime of the comparable Modelo 720 – with fines of up to 150% of the asset value and minimum penalties of €10,000 per data record – was ruled disproportionate and contrary to EU law by the European Court of Justice in its judgment of 27 January 2022 (Case C-788/19). Following this ruling, the penalty system was reformed through Ley 5/2022. The underlying reporting obligation itself remains unaffected and continues to apply in full – errors in classifying the place of custody or in valuation can still lead to audits and additional tax assessments.

Note: The specific, currently applicable penalty provisions for the Modelo 721 should be checked in detail with a tax advisor licensed in Spain (Gestor/Asesor Fiscal) before every submission, as the penalty rules have changed several times in recent years.

Most common mistakes when filing

• Incorrect classification of the place of custody: Crypto held on a foreign exchange is wrongly treated as a "personal wallet", or vice versa.
• Total value instead of individual item: It's overlooked that the €50,000 threshold applies to the sum of all foreign platforms, not to individual coins.
• Follow-up report forgotten: An increase in value of more than €20,000 compared to the last report is not reported subsequently.
• Confusion with income tax: The Modelo 721 is mistaken for a tax return – in reality, it does not replace the reporting of realised gains in the Modelo 100.
• Missed deadline when closing an account: If a foreign account is closed during the year, the reporting obligation up to the date of disposal is overlooked.
• Community of property ignored: In the case of marital community of property, only one partner reports, even though both would need to declare the full value.

What comes next?

Once you've filed, you should carefully archive the confirmation from the Sede Electrónica – it serves as proof for any future queries from the AEAT. You should also check every year on 31 December whether your holdings have changed by more than €20,000, so you don't miss the follow-up reporting deadline. At the same time, you should record realised gains from sales or swaps in your income tax return. Anyone wanting general information about their tax situation as a new resident will find further details in our overview on Taxes & Finances for Expats as well as on the Double Taxation Agreement between Germany and Spain.

Modelo 721 Checklist

• Tax residency in Spain checked (>183 days or centre of economic interests)
• Total value of all crypto assets on foreign platforms as at 31 December determined
• Custody location of each position clearly identified (exchange vs. self-custody)
• For married couples with community of property: full value, not just share, checked
• Wallet addresses, amounts and euro values documented per position
• Valuation exchange rate as at 31 December recorded using a standard liquidity aggregator
• Deadline 1 January – 31 March noted in the calendar
• Previous year's report compared with current holdings (increase > €20,000?)
• Realised gains recorded separately for income tax (IRPF)
• If uncertain: appointment arranged with a tax adviser/gestoría

Conclusion

For many expats holding crypto, the Modelo 721 is a new but clearly defined obligation: anyone who is tax resident in Spain and holds more than €50,000 in virtual currencies on foreign exchanges must report this electronically every year between 1 January and 31 March. The decisive question is always who controls the access keys – only holdings on third-party managed platforms count, while one's own cold wallets generally do not. The report itself does not incur any tax, but it does not replace the separate recording of realised gains in the income tax return. Anyone who keeps track of deadlines and thresholds and correctly classifies the place of custody avoids the most common mistakes – for more complex portfolios or in cases of uncertainty, it's worth consulting a gestoría early on.

Official sources

• Agencia Tributaria – Procedure Modelo 721: https://sede.agenciatributaria.gob.es/Sede/procedimientoini/GI55.shtml
• Agencia Tributaria – Procedure Modelo 720: https://sede.agenciatributaria.gob.es/Sede/procedimientoini/GI34.shtml
• Legal basis: Ley 11/2021 de medidas de prevención y lucha contra el fraude fiscal
• ECJ ruling of 27.01.2022, Case C-788/19 (on the sanctions regime of Modelo 720)
• Ley 5/2022 (reform of the sanctions system)
• Ley 35/2006 (IRPF – taxation of capital gains)