Binding Ruling V1030-25: Scope of the Obligation to Declare Partial Transfers in Form 721
- Business Expats
- 6 days ago
- 3 min read
The Binding Ruling V1030-25, dated June 20, 2025, issued by the Spanish Directorate-General for Taxation (DGT), provides a relevant interpretation of Article 42 quater of the RGAT (Royal Decree 1065/2007) regarding the obligation to report virtual currencies held abroad through Form 721.
The case responds to a query from a taxpayer who, having declared in 2023 the ownership of certain virtual currencies held outside Spain, carried out partial sales of those assets in 2024. The doubt was whether such partial transfers required the submission of a new Form 721 for the tax year.
Legal Framework
The reporting obligation is established in the 18th Additional Provision of the General Tax Law, as developed in Articles 42 bis, 42 ter, 42 quater, and 54 bis of the RGAT. Regarding virtual currencies, Article 42 quater stipulates:
The obligation to declare balances as of December 31 each year (Art. 42 quater.1).
The obligation to declare when a taxpayer has been the holder or authorized party at any point during the year, even if that status was lost before year-end (Art. 42 quater.4, second paragraph).
The obligation to declare again in subsequent years if balances increase by more than €20,000 compared to the last return filed, or when there is a total or partial loss of ownership or authorization (Art. 42 quater.6, third paragraph).
Additionally, Article 42 quater.7 treats each type of virtual currency as a separate block of information, meaning that changes in the ownership of a specific cryptocurrency must be reported independently of others.
DGT’s Position
The DGT concludes that partial transfers fall within the scope of the reporting obligation:
Loss of ownership does not need to be total; the partial sale of previously declared virtual currencies also constitutes a “loss of ownership” under Art. 42 quater RGAT.
Each partial transfer must be recorded in Form 721, specifying the date and value in euros.
This interpretation is consistent with prior administrative doctrine on securities held abroad (Rulings V2643-17 and V0801-18), which established that partial disposals of securities also trigger reporting obligations under Form 720.
Systemic Consistency
This ruling is not an isolated innovation but rather part of the broader logic of international reporting obligations:
For financial accounts (Art. 42 bis RGAT), securities and insurance (Art. 42 ter), and real estate (Art. 54 bis), reporting is required not only when balances increase but also when ownership is extinguished — either totally or partially.
Extending this principle to crypto-assets reinforces regulatory coherence and ensures full traceability of changes in taxpayers’ asset positions.
Practical Implications
This interpretation means taxpayers must maintain an exhaustive record-keeping system for movements in virtual currencies held abroad, including:
Precise identification of each transaction, with date and euro valuation at the applicable exchange rate.
Retention of supporting documentation (exchange reports, custody confirmations, statements).
Control by each type of crypto-asset, as each is considered an autonomous dataset.
The practical result is that Form 721 becomes a dynamic return, not limited to an inventory of balances at December 31 but also capturing changes during the year.
Conclusion
Binding Ruling V1030-25 consolidates the Spanish Tax Agency’s interpretive line: partial transfers of crypto-assets held abroad that have been previously declared must also be included in Form 721. This reflects a logical and systematic application of Art. 42 quater RGAT, aligned with existing administrative case law on securities and real estate.
This interpretation imposes a high level of documentation and reporting discipline on taxpayers, while also anticipating the convergence of Form 721 with European standards on digital asset transparency arising from MiCA and DAC8.
These developments and their interaction with EU regulations will be analyzed in detail at the specialized event on October 10, which will cover both recent administrative criteria and compliance strategies enabling taxpayers and advisors to prepare for an increasingly demanding regulatory environment.
Comments