Investors who move assets into self-custody before the end of the year should review their obligations with Form 721 to avoid penalties for extinguished balances.
The tax calendar is inexorably moving towards the end of the fiscal year, and cryptocurrency investors are at a crucial moment for wealth planning.
As December 31st approaches, it's common to see strategic fund transfers between different platforms and digital wallets. However, this year a regulatory interpretation takes on particular significance, potentially surprising those seeking to optimize their tax privacy through the use of cold wallets.
The Tax Agency has refined its criteria regarding the location of assets digital and has focused on outflows from foreign platforms, debunking the popular belief that withdrawing funds before midnight exempts one from certain reporting obligations.
The core of the debate lies in the correct interpretation of asset location. Spanish regulations establish substantial differences between having capital deposited on a platform based outside of Spain and maintaining it under one's own control. Understanding this distinction is vital to avoid future issues, as self-custody has become the preferred refuge for many investors seeking security and sovereignty over their assets. private keys.
However, simply possessing the keys does not erase the history of transactions made during the fiscal year, a technical detail that the tax administration monitors with increasingly sophisticated tools.
Trade crypto with confidence at Bit2MeDeclaring cryptocurrencies in 2025: keys to avoiding mistakes and penalties
To understand the implications of the 2025 fiscal year-end, it is necessary to break down how the Treasury categorizes the location of digital currencies.
The general rule states that crypto assets are considered to be located abroad when the entity providing the safeguarding service has its registered office outside of Spain. This automatically triggers the obligation to file the Model 721 If the combined value of these assets exceeds €50.000. Conversely, assets stored on hardware devices or software wallets where the user is the sole custodian of the cryptographic keys are considered to be located within the national territory, regardless of where those funds initially originated, and are therefore not included in the calculation for Form 721, as they are not considered to be located abroad under this custody criterion.
This regulation allows taxpayers to manage their portfolio before the end of the calendar year. In fact, if the total balance on foreign platforms as of December 31st is less than the €50.000 limit, the obligation to declare the balance disappears, even if that figure was exceeded during the year, according to [the relevant regulations]. illustrates the firm of economists and lawyers Pérez Parras Economists & Lawyers in several practical examples.
However, There is one crucial exception which prevents simply "emptying" accounts to avoid declaring: the termination of ownershipAccording to Pérez Parras, if an investor ceases to be the owner of the cryptocurrencies – for example, by selling all of their positions or closing the account abroad before the end of the year – the obligation arises to report this termination, indicating the balance on the date of the transfer, regardless of whether the account balance is zero on December 31.
Compliant with the tax authorities. Trade crypto on Bit2MeAvoid penalties by declaring digital assets withdrawn from abroad
The most critical aspect that investors must bear in mind before the end of 2025 is the obligation to declare the balances that have been lost abroad.
La regulations It contemplates a specific assumption known as the termination of ownershipThis means that if an investor held a position exceeding €50.000 on a foreign platform at any point during the year and subsequently withdrew those funds to a self-custody wallet or a Spanish platform, the reporting obligation remains, although it does not apply to new investors. Only recurring investors, who have already filed Form 721 in previous years, are required to report the balance held on the foreign platform at the exact moment of the withdrawal or account closure.
Omitting this detail is the most frequent mistake and the one that carries the greatest risk of penalty. Investors may mistakenly believe they have complied with the law by repatriating their digital assets, when in reality they have triggered a clause requiring transparency regarding the transfer of that capital.
Form 721 is specifically designed to capture this information, requiring taxpayers to detail the date and value of the funds at the time they ceased to be held in foreign custody. Ignoring this requirement under the premise that the funds are already in a cold wallet or on a regulated platform in Spain can be interpreted as concealment of information, leaving the taxpayer vulnerable to administrative audits that could have been avoided with a correct declaration.
Access cryptocurrencies with confidence hereHow to manage your tax return when holding cryptocurrencies in self-custody
Cryptocurrency investors need to understand when their digital assets actually impact their taxes, beyond the obligation of Form 721.
In the case of personal income tax and the Model 100The law states that holding cryptocurrencies without moving them, in methods such as cold storage or HODL, does not generate a tax liability. In other words, a user can store large amounts on their Ledger device without paying taxes as long as those crypto assets remain static. However, the moment they are exchanged for other currencies or converted to euros, a taxable event occurs. This exchange must be reflected as a capital gain or loss, affecting the savings base and, therefore, the tax return.
Furthermore, the self-management of cryptocurrencies adds an additional layer of administrative complexity. Operating outside of centralized platforms means that the tax authorities do not receive automatic transaction information from the platforms that manage them. Therefore, The taxpayer must keep a detailed record of each transactionjustifying the legitimate origin and acquisition cost of the crypto assets to be prepared for any possible inspection or requirement by the agency.
Furthermore, simply owning cryptocurrencies can affect wealth tax or the Solidarity Tax for large fortunes. If the total assets exceed certain thresholds—usually €700.000, although this varies by region and autonomous community—taxes must be paid on the market value of the portfolio at the end of the fiscal year. This requirement necessitates declaring a snapshot of one's assets, including all cryptocurrencies held in self-custody.
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Bit2Me Tax: a key tool for filing cryptocurrency tax returns without errors this tax year
The end of the 2025 fiscal year is approaching, and filing cryptocurrency-related tax returns requires precision and care to avoid errors with the tax authorities.
In this stage, Bit2Me Tax It emerges as a fundamental option for those who trade within the exchange and need to report their transactions efficiently. Its intuitive interface It automates the recording of all transactions made on the platform.From purchases and sales to swaps and returns earned on services like Earn or staking. Thanks to this, the tool ensures that each internal movement is classified and calculated in accordance with current tax regulations – including the FIFO method – greatly facilitating the declaration of these assets.
Bit2Me Tax stands out for its accessibility to users with no accounting experience, allowing them to download the complete tax report with a single click. It also offers the peace of mind of having a support team and the option to schedule appointments with external tax advisors for complex cases.
Overall, this tool streamlines tax preparation for transactions on the exchange, offering support that fosters confidence within an increasingly detailed regulatory framework. Therefore, Bit2Me Tax is positioned as an essential ally for those seeking to close the 2025 fiscal year with their Bit2Me accounts clear and in order.
Looking ahead, the company plans Integrate Bit2Me Tax with other platforms, with the aim of facilitating access to comprehensive tax reports on all of its users' cryptocurrencies, which will further expand its capabilities and reach.
