In recent years there has been an increasingly strong adoption of cryptocurrencies in society, and in a context in which the globalization of the economy, new business models and the emergence of disruptive technological advances, such as blockchain, are posing significant challenges, the prevention and fight against tax fraud require a strategy that provides the Tax Administration with the necessary means to optimize its results. Translated with www.DeepL.com/Translator (free version) Therefore, important amendments are introduced in Law 11/2021, of July 9, on measures to prevent and combat tax fraud.

In order to reinforce tax control over the taxable events related to virtual currencies, the following are established new reporting obligations regarding the holding and trading of virtual currenciesaffecting the persons and entities resident in Spainpermanent establishments in Spanish territory of persons or entities resident abroad, and the entities referred to in Article 35.4 of Law 58/2003, of December 17, 2003, General Tax Law. declaraciones informativas Modelo 172, 173 y 721which will be open for the first time, on January 1, 2024.

New Obligations Before the Treasury For Custodians – Exchanges And Issuers Of Ico’s.

What is meant by virtual currencies?

It is important to mention that only reference is made to “virtual currencies”, not to any other crypto-asset, and furthermore they are defined in Article 1.5 of Law 10/2010, of April 28, 2010, on the prevention of money laundering and terrorist financing as:

<<Virtual currency shall mean a digital representation of value that is neither issued nor guaranteed by a central bank or public authority, is not necessarily associated with a legally established currency and does not have the legal status of currency or money, but is accepted as a medium of exchange and can be transferred, stored or traded electronically.>>

FORM 172 – REPORT CRYPTO & FIAT BALANCES

Who are obliged to file Form 172? trustees

Those persons, entities or permanent establishments that provide services for safeguarding private cryptographic keys on behalf of third partiesThe services, whether such service is provided on a principal basis or in connection with another activity, shall be provided in the following cases obliged to provide the tax authorities with the following informationinformation on all the virtual currencies held in custody.

What information do they have to provide?

Through Form 172 – “Informative declaration on balances in virtual currencies”, they will be obliged to communicate to the Tax Agency all the information related to the totality of the virtual currencies that they keep in custody.

This supply will include:

• Outstanding information in each different virtual currency and, if applicable, in legal tender (FIAT).
• As well as the identification of the holders, authorized or beneficiaries of these balances.

FORM 173 – REPORT CRYPTO MOVEMENTS

Who are obliged to file Form 173? – CUSTODIOS – EXCHANGES – ICO

Those persons, entities or permanent establishments that provide exchange services between virtual currencies and legal tender or between different virtual currencies, or intermediate in any way in the performance of such operations, or provide services to safeguard private cryptographic keys on behalf of third parties.to hold, store and transfer virtual currencies. Also those that perform initial offers of new virtual currencies, with respect to those delivered in exchange for the contribution of other virtual currencies or legal tender.

What information do they have to provide?

Through Form 173 – “Informative declaration on operations with virtual currencies”, custodians, Exchanges and ICO promoters will be obliged to provide the Tax Agency with information on:

• acquisition, transmission, exchange and transfer operations related to virtual currencies,
• as well as the collections and payments made in these currencies, in which they intervene,
• submitting a nominal list of the parties involved, indicating their domicile and tax identification number, class and number of virtual currencies, as well as the price and date of the transaction.

Are all entities that are registered in the Bank of Spain’s Registry of virtual currency for fiat currency exchange and electronic purse custody service providers subject to Forms 172-173?

Not necessarily. Those obliged to register with the Bank of Spain in order to obtain a license to operate as a custodian or provider of exchange of virtual currency for fiat currency in Spain are:

• Individuals or legal entities, whatever their nationality, that offer or provide these services in Spain.
• Individuals who provide these services when the base, direction or management of these activities is located in Spain, regardless of the location of the recipients of the service.
• Legal entities established in Spain that provide these services, regardless of the location of the recipients.

Therefore, the obligation will depend on whether you are a Spanish resident or, if you are a non-resident, whether you operate through a permanent establishment in Spanish territory.

FORM 721 – INFORMATIVE DECLARATION ON VIRTUAL CURRENCIES LOCATED ABROAD.

Who is required to file this Form 721?

The taxpayers of this model will be obliged to file an annual informative return with respect to the totality of virtual currencies located abroad of which are located abroad of which are headlines, or in respect of which it has the condition of beneficiary, authorized or in any other way has the power to dispose of, or of which it has the power to is the actual holder.

The regulation of this Form 721 can be found in Article 42 quater of Royal Decree 1065/2007, of July 27, 2007, which approves the General Regulation of the actions and procedures for tax management and inspection and for the development of the common rules of the procedures for the application of taxes.

What is meant by currencies located abroad?

Virtual currencies are shall be deemed to be located abroad when the person or entity or permanent establishment that holds them provides services to safeguard the private cryptographic keys on behalf of third parties, to maintain, store and transfer these currencies, not be obliged to submit through any other declaration to the Tax Agency this information.. That is to say, if our cryptocurrencies are housed in exchanges or custodians that must submit to the Tax Authorities the forms 172 or 173 explained above, we will not be obliged to file this informative declaration.

What information will we have to provide to the Tax Agency?

Mainly all the data of the custodians of the virtual currencies, the complete identification of each type of currency and the information on the balances as of December 31 (valuation in euros).