Declaring Foreign and DeFi Cryptocurrencies: What You Need to Know About Form 721
A complete guide to Form 721 and how to declare your cryptocurrencies held abroad or on DeFi platforms under Spanish tax regulations.
Cleriontax Team
Crypto Tax and Data Analysis Experts
Form 721 is a new tax reporting requirement introduced by the Spanish Tax Agency (AEAT) for declaring cryptocurrencies located abroad or managed through decentralized platforms (DeFi).
Its implementation marks a turning point in Spanish crypto taxation, strengthening transparency and control over digital asset holdings. Understanding when it applies, what information it requires, and how to avoid penalties is essential for any investor operating with cryptocurrencies outside Spain.
What Form 721 Is and Who It Applies To
Form 721 is a mandatory informational declaration for individuals and legal entities resident in Spain who hold digital assets outside the national territory or in wallets not managed by a Spanish-based provider.
Who Must File It?
This obligation applies to:
- Investors with cryptocurrencies on foreign exchanges (Binance, Kraken, Coinbase, etc.)
- Users of non-custodial wallets (MetaMask, Ledger, Trezor, etc.)
- Participants in DeFi protocols (Uniswap, Aave, Compound, MakerDAO, etc.)
- Holders of cryptocurrencies on public blockchains without Spanish intermediaries
Purpose of Form 721
Its goal is to enhance tax transparency and allow the AEAT full visibility over Spanish taxpayers’ cryptocurrency holdings, particularly assets outside the control of regulated entities in Spain.
Important: This form does not replace the income tax return or the wealth tax. It is an additional and complementary informational obligation.
When You’re Required to File Form 721
Submitting Form 721 is not mandatory for all crypto investors. There are specific thresholds determining who must file.
Minimum Threshold Criteria
Taxpayers must file if, as of December 31, they hold a total value exceeding €50,000 in cryptocurrencies:
- ✅ Custodied on foreign exchanges
- ✅ Stored in personal (non-custodial) wallets
- ✅ Deposited in DeFi protocols
- ✅ Engaged in staking or yield farming on international platforms
The threshold is calculated based on the market value of the assets on that date, using public reference prices (CoinMarketCap, CoinGecko, etc.).
Capital Increase Criteria
Once the first report is filed, you’ll only need to file again when:
- The value of assets increases by more than €20,000 compared to the last declaration
- You no longer hold cryptocurrencies abroad (deregistration filing)
This means that if your crypto holdings remain stable or grow moderately, you won’t need to file the form every year.
Filing Deadline
Form 721 must be submitted during the month of March of the year following the tax year. For example, for cryptocurrencies held on December 31, 2024, the filing period will be March 2025.
Information Required in the Declaration
The AEAT requires a significant level of technical detail in Form 721, which can be complex for investors using multiple wallets or DeFi protocols.
Mandatory Data for Each Asset
For each cryptocurrency exceeding the threshold, you must include:
- Type of cryptocurrency (Bitcoin, Ethereum, USDT, etc.)
- Quantity held as of December 31
- Market value in euros on that date
- Public address or wallet where it’s stored
- Blockchain network (Ethereum Mainnet, Polygon, BSC, Solana, etc.)
Custody Information
Centralized Exchanges and Platforms
If assets are held by third parties (exchanges), include:
- Full name of the exchange or platform
- Country of tax residence of the entity
- Tax ID or registration number
- Official company address
Personal Wallets and DeFi Protocols
For non-custodial wallets and DeFi, include:
- Public wallet address
- Specific blockchain network
- Associated tokens and smart contracts
- DeFi protocols where funds are deposited
This requires precise technical analysis to ensure that information is complete and verifiable, especially when using multiple wallets or engaging with several protocols simultaneously.
Practical Example
Case: A Spanish investor with €60,000 in cryptocurrencies distributed as follows:
- €35,000 in Bitcoin on Binance (foreign exchange)
- €15,000 in Ethereum on MetaMask (personal wallet)
- €10,000 in USDC deposited in Aave (DeFi protocol)
Obligation: Must file Form 721 declaring:
-
Bitcoin on Binance:
- Amount: 0.5 BTC
- Value: €35,000
- Platform: Binance Holdings Ltd.
- Country: Malta
-
Ethereum on MetaMask:
- Amount: 6 ETH
- Value: €15,000
- Wallet: 0x742d35Cc6634C0532925a3b844Bc9e7595f0bEb
- Network: Ethereum Mainnet
-
USDC on Aave:
- Amount: 10,000 USDC
- Value: €10,000
- Protocol: Aave V3
- Wallet: 0x742d35Cc6634C0532925a3b844Bc9e7595f0bEb
- Network: Ethereum Mainnet
Differences Between Form 721 and Other Tax Forms
It’s common to confuse Form 721 with other tax obligations related to cryptocurrencies. Let’s clarify the differences:
Form 721 vs Form 100 (Income Tax)
| Aspect | Form 721 | Form 100 |
|---|---|---|
| Purpose | Informative asset holding declaration | Income/gains declaration |
| Obligation | Only if holdings abroad exceed €50,000 | Mandatory if income exists |
| Frequency | Only when significant changes occur | Annual |
| Content | Asset balance and location | Income and capital gains |
Form 721 does not replace Form 100. While Form 100 reports gains and losses earned during the year, Form 721 reports digital asset holdings abroad as of December 31.
Form 721 vs Form 720 (Foreign Assets)
| Aspect | Form 721 | Form 720 |
|---|---|---|
| Scope | Cryptocurrencies and digital assets only | Bank accounts, real estate, securities |
| Threshold | €50,000 | €50,000 per category |
| Penalties | Specific to cryptoassets | General foreign asset penalties |
Form 721 should not be confused with Form 720, which applies to other assets abroad. Form 721 is specific to cryptocurrencies and virtual assets, with its own technical and fiscal requirements.
Form 721 vs Form 714 (Wealth Tax)
| Aspect | Form 721 | Form 714 |
|---|---|---|
| Purpose | Report assets held abroad | Calculate wealth tax |
| Threshold | €50,000 in foreign crypto | Variable by region (approx. €2M general) |
| Taxation | No direct tax generated | Does create payable tax |
Form 714 (Wealth Tax) may include cryptocurrencies in total wealth calculations, but Form 721 is an independent informational declaration.
Risks of Not Filing Form 721
Failure to comply with Form 721 requirements can lead to severe and costly tax consequences.
Penalties for Non-Submission
Failing to file Form 721 when required may result in:
- ⚠️ Minimum fine: €1,500 per missing data item or dataset
- ⚠️ Late filing fine: €100 per data point, minimum €1,500
- ⚠️ Serious violation: Proportional fines up to 150% of undeclared asset value
Presumption of Undeclared Capital Gains
Beyond direct penalties, the AEAT may apply a harmful legal presumption:
If you don’t declare your foreign cryptocurrencies via Form 721, the Tax Agency may assume those assets generated unjustified capital gains, applying retroactive taxation at maximum rates.
This means you could be taxed on profits you never earned, simply for not having reported your holdings.
International Data Exchange
The AEAT can cross-reference information obtained from:
- ✅ International exchanges (via tax information exchange agreements)
- ✅ EU-registered crypto service providers
- ✅ Public blockchain analysis (addresses and transactions)
- ✅ Third-party disclosures (partners, platforms, etc.)
This significantly increases the likelihood of discrepancy detection, which may lead to audits, inspections, or fines.
Real Case: Omission Penalties
Example: A taxpayer with €150,000 in cryptocurrencies on Binance did not file Form 721.
Consequences:
- Failure-to-file fine: €10,000 (multiple data omissions)
- Assumed capital gain: AEAT treated the €150,000 as undeclared income
- Additional tax bill: €42,000 in IRPF (28% top rate + surcharge)
- Total: Over €52,000 in penalties and tax adjustments
This real case shows the importance of complying with this reporting requirement.
How to Ensure a Correct and Secure Filing
Properly filing Form 721 requires technical accuracy, tax knowledge, and structured information access.
Information Required for Proper Filing
To comply with Form 721, you need:
- ✅ Complete list of all your wallets and public addresses
- ✅ Exact balance of each cryptocurrency as of December 31
- ✅ Verifiable market prices for that date
- ✅ Identification of blockchain networks (Ethereum, Polygon, BSC, etc.)
- ✅ Exchange and platform data used
- ✅ Traceability of DeFi protocols where funds are deposited
Main Technical Challenges
Crypto investors face several challenges when preparing Form 721:
- Multiple wallets: Consolidating all information if using several wallets
- Tokens on multiple networks: A single token can exist on Ethereum, Polygon, BSC, etc.
- Complex DeFi protocols: Staking, farming, and lending require specific valuations
- Historical prices: Obtaining exact December 31 market values can be difficult
- Custody identification: Distinguishing between self-custody and third-party custody
How Cleriontax Helps
At Cleriontax, we collect, structure, and verify all the necessary data to ensure the declaration is complete and compliant with current regulations.
Our process:
- Automatic import of data from exchanges, wallets, and blockchain
- Analysis of all public addresses and DeFi protocols used
- Market valuation verified as of December 31
- Identification and classification of each asset by custody type
- Technical report generation supporting every declared data point
- Personalized tax review by our expert team
- Electronic submission directly to the AEAT
Our tax team reviews each case individually and produces a full technical report supporting all declared information, providing legal certainty and peace of mind against potential audits.
Conclusion: Compliance and Fiscal Transparency
Form 721 represents another step toward the fiscal normalization of digital assets in Spain. Although filing may be technically complex, complying with this requirement strengthens transparency and protects investors from penalties and adverse presumptions.
Key points to remember:
- ✅ Threshold: €50,000 in cryptocurrencies abroad or in DeFi as of December 31
- ✅ Deadline: March of the following tax year
- ✅ Content: Detailed information for each asset, wallet, and platform
- ✅ Complementary: Does not replace Forms 100 or 714
- ✅ Penalties: Can be severe (up to 150% of undeclared value)
At Cleriontax, we help our clients identify which assets must be included, calculate their value precisely, and file the form safely before the AEAT.
Cleriontax: Experts in Form 721 and Crypto Taxation
Do you hold cryptocurrencies on foreign exchanges or DeFi protocols? Don’t leave Form 721 to the last minute. Our expert team will help you meet all your tax obligations safely and professionally.
Contact our team for a free initial assessment. We’ll explain exactly what information we need and how we ensure a complete, compliant declaration for AEAT.
Disclaimer: This article is for informational and educational purposes only. It does not constitute personalized tax advice or investment recommendations. Tax laws are subject to change, and each personal situation is unique. Always consult a certified professional tax advisor for your specific case.
Last updated: October 2025
Published by: Cleriontax Team – Experts in Cryptocurrency Taxation and Data Analysis
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