Form 720 and cryptocurrencies

If you have assets and rights abroad, you should know Form 720, find out if you are obliged to present it and analyze the situation regarding the so-called cryptocurrencies. We clear all your doubts.

Form 720 is an informative return whose goal is to prevent tax fraud. Since it began to be applied, it has been the subject of numerous criticisms because, despite being an informative declaration, failure to present the declaration carries significant penalties.

Form 720 Spain: who is obliged to file it and what information is required

The following persons and entities are obliged to present Form 720, with the exceptions established by law:

• Natural and legal persons residing in Spanish territory.
• The permanent establishments that are in the Spanish territory of non-resident persons or entities.
• Entities such as recumbent inheritances, communities of assets and other entities that do not have legal personality, but they have assets.

Those obliged to declare Form 720 must report on three basic issues.

• The accounts they have in financial institutions that are abroad.
• The securities, rights, insurance and income deposited, managed or obtained abroad.
• Real estate and rights to real estate located abroad.

And do not forget an important fact: the deadline to present the Form 720 ends on March 31.

Form 720 and cryptocurrencies

For a few months, there has been a lot of talk about cryptocurrencies and Bitcoin, and we already know that they can be bought as an investment and that they can also be used as a means of payment, depending on the case. But what relationship do cryptocurrencies have with Form 720 Spain?

To know if it is necessary to include cryptocurrencies and Bitcoin in Form 720 Spain, we must analyze if it fits into any of the categories that must be declared. In this sense, when the General Tax Law in the regulation of Form 720, establishes the obligation to report on assets and rights, among those assets and rights, we find:

• Accounts located abroad opened in entities that engage in banking or credit traffic.
• Securities, assets, securities or rights representing the capital stock, own funds or entities’ equity.
• Annuities.
• Real estate and rights thereon.

Cryptocurrencies, in principle, do not fit into any of these categories clearly and unequivocally since they are not in a bank as such. Therefore, there is no basis for an obligation to declare cryptocurrencies in Form 720. However, we will have to wait for the evolution of the jurisprudence in this regard and the resolutions of the General Tax Directorate.