Spanish tax authorities have confirmed that cryptocurrency stored in self-custody wallets is not subject to reporting under Form 721 if the owner retains control over the private keys. This clarification is provided in mandatory consultation V0848 26 dated April 21 and in the Spanish Tax Agency's guidance. Form 721 covers virtual currencies abroad if they are held by entities that safeguard the keys on behalf of clients. The obligation applies to individuals and legal entities resident in Spain, permanent establishments of non-residents, and several other entities. The threshold for mandatory reporting is €50,000.
The tax directorate differentiates between custodial and non-custodial wallets based on who controls the assets or keys. Internet connectivity is not a decisive factor: both hot and cold wallets receive the same treatment. A hardware wallet falls outside the scope of Form 721 if the taxpayer controls the keys themselves. Foreign custodial services, on the other hand, may require reporting when the keys are held by a third party outside Spain.
The consultation reviewed the case of a Spanish resident who established a U.S. limited liability company in 2025 for long-term storage of crypto assets. If the taxpayer held the keys themselves, the assets are not subject to reporting—regardless of the type of wallet. If the keys were held by a foreign third party, the assets might fall under Form 721.
Exclusion from Form 721 does not exempt transactions with such wallets from other regimes. The EU DAC8 regulation, which came into effect on January 1, 2026, requires service providers to collect information about users and transactions, including transfers between regulated platforms and external addresses. The definition of custodial services is partially borrowed from the MiCA regulation.
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