New reporting obligations on cryptocurrencies

For some time now, tax regulations relating to cryptocurrencies have been evolving in order to have more control over this type of asset and to avoid tax fraud. In relation to the above, in July three new information forms were approved relating to transactions with virtual currencies. We analyse them in this article.

Forms 172, 273 and 721 on virtual currencies

  • Form 172 “Information return on balances in virtual currencies”.
  • Form 173 “Information return on transactions with virtual currencies.

These forms must be used for returns to be filed in January 2024 and which refer to the financial year 2023.

In July, Form 721, or information return on virtual currencies located abroad, was also approved. It will apply between 1 January and 31 March 2024.

Form 172 information return on balances in virtual currencies

It must be filed annually and must include all cryptocurrencies held by a person or entity. The declaration must be made electronically through the Tax Agency’s Electronic Headquarters by means of informative messages.

The declaration will contain the following information:

  • Data of the declarant.
  • Balance of each type of virtual currency as at 31 December expressed in units of the virtual currency and in euro.
  • Balance of fiat currency as at 31 December and its valuation in euro.

Form 173 or information return on transactions with virtual currencies

This form is filed annually and refers to transactions carried out with cryptocurrencies during the year prior to the declaration. It must be filed by persons or entities residing in Spain and permanent establishments in Spanish territory that provide services of exchange of virtual currencies for fiat currency or between virtual currencies.

Form 721 or information return on virtual currencies located abroad

In this case, the persons obliged to file the form are those who have their tax residence in Spain and who have cryptocurrencies held abroad. The form is filed annually.

What happens if the reporting formats are not submitted?

If you hold virtual currencies or carry out transactions with virtual currencies and do not submit the above-mentioned forms, a fine may be imposed, the amount of which will vary depending on the circumstances of each case.

If you do not submit the forms or you incorrectly report the amount of cryptocurrencies held abroad, you may be fined €5,000 for each piece of information or set of information. The minimum fine is €10,000.

In the event that you submit the information forms after the deadline and without a prior request from the tax authorities, the amount of the fine will be 100 euros for each piece of information or set of information, with a minimum of 1,500 euros.

In short, if you have cryptocurrencies, it is important that you are aware of the tax obligations you must comply with and that you consult with tax advisors who are experts on the subject.