The Spanish Tax Administration Agency (Agencia Tributaria) has announced the launch of Form 721, dedicated to declaring virtual assets abroad.

According to the new rules, published in the Official Gazette of the State on July 29, 2023, taxpayers must file Form 721 returns from January 1 until the end of March 2024, disclosing funds stored in their foreign accounts until December 31, 2023.

Individuals with balances exceeding €50,000 (around $55,000) are required to report, while cryptocurrency holders using self-managed wallets must report via the standard wealth tax form 714.

The move comes after reports that Spain’s tax administration agency plans to issue 328,000 warning notices to taxpayers in 2022, a 40% increase from 2021, indicating an increased focus on tax compliance in the cryptocurrency sector.

Meanwhile, Spain’s Civil Guard, the country’s oldest legal agency, busted a criminal group in August responsible for a massive cryptocurrency scam that defrauded nearly $110 million from more than 3,000 people around the world.

Internationally, many governments are stepping up their efforts to combat potential under-reporting of taxable transactions in this sector.

The US Internal Revenue Service (IRS) began issuing letters to taxpayers regarding cryptocurrency transactions in July 2019, with the aim of raising awareness of tax obligations.

Finally, 48 countries issued a joint statement on the global commitment to combating offshore cryptocurrency-related tax evasion, and adopted the Crypto Asset Reporting Framework (CARF) as a new standard for tax transparency.