Modelo 720 and 721: guide for Spanish residents with foreign accounts

50,000 EUR per block is the threshold that triggers Modelo 720; Modelo 721 adds crypto held outside a Spanish exchange. If you are a Spanish tax resident with an LLC, Wise, Mercury or broker, here is the deep dive.

If you are a Spanish tax resident and own a <a href="/en/blog/us-llc-for-non-residents-tax-structure">US LLC</a>, a Wise or Mercury account, a foreign broker or any meaningful crypto balance outside a Spanish exchange, two filings draw the line between being safe and having a serious problem: Modelo 720 and Modelo 721. Almost every other article on this blog refers to them in passing; this one is the reference piece to understand them properly.

CRS 2.0, CARF and DAC8 for Modelo 720 and 721

For Spanish residents, the OECD package (CRS 2.0 + CARF transposed via DAC8) will reinforce the cross-checks that the AEAT already runs against Modelo 720 (foreign accounts and securities) and Modelo 721 (crypto-assets custodied abroad): more reporting institutions, more data per account and more automation on every reconciliation.

The OECD adopted an integrated package combining CRS 2.0 (the revised Common Reporting Standard, which brings EMIs and specified electronic-money products into the perimeter and tightens due diligence on controlling persons) and CARF (the Crypto-Asset Reporting Framework, which extends automatic exchange to crypto exchanges, custodians and crypto-derivative platforms). The European Union transposed it through Directive (EU) 2023/2226 (DAC8), adopted on 17 October 2023, which amends Directive 2011/16/EU to incorporate both components. The substantive application date is 1 January 2026 and the first effective exchange lands in January 2027, covering the prior reporting-year data.

Official sources: <a href="https://www.oecd.org/tax/automatic-exchange/common-reporting-standard/" target="_blank" rel="noopener nofollow">OECD — CRS</a>, <a href="https://www.oecd.org/tax/exchange-of-tax-information/crypto-asset-reporting-framework-and-amendments-to-the-common-reporting-standard.htm" target="_blank" rel="noopener nofollow">OECD — CARF</a>, <a href="https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023L2226" target="_blank" rel="noopener nofollow">EUR-Lex — Directive (EU) 2023/2226 (DAC8)</a>.

Modelo 720 and Modelo 721 are Spanish resident reporting questions, not simply CRS questions. The key is whether the taxpayer, account, security, crypto position or controlling interest triggers a Spanish filing duty; automatic exchange is only one source of visibility. US banking privacy may change the data route, but it does not replace the resident's own reporting analysis. We unpack the broader privacy layer in <a href="/en/blog/crs-carf-and-us-banking-privacy-for-llc-owners">CRS, CARF and US banking privacy for your LLC</a>.

What Modelo 720 is

Modelo 720 is the "informational return on assets and rights located abroad". It was created by Law 7/2012 on the prevention of tax fraud and developed in Order HAP/72/2013, later amended by Order HFP/887/2023. It is not a tax: no liability is assessed. It is an informational regime that requires Spanish tax residents to declare ownership and balances of certain assets located outside Spain when statutory thresholds are exceeded.

It covers three separate blocks, each with its own aggregated EUR 50,000 threshold:

Each block is assessed independently. You may be obliged in accounts only, in securities only, in real estate only, or in several. The duty arises when the threshold is exceeded in at least one block.

What Modelo 721 is

Modelo 721 is the crypto sibling of the 720. It is regulated by Order HFP/886/2023, of 26 July, implementing Royal Decree 249/2023, and requires reporting of virtual currencies located abroad when their aggregated balance at 31 December exceeds EUR 50,000. The first campaign has already been filed (tax year 2023).

A crypto asset is "located abroad" when it is custodied by a non-Spanish resident entity or person (Coinbase US, Kraken, Binance outside its Spanish entity, Ledger in self-custody combined with a foreign provider, etc.). If your crypto is in an entity registered with the Bank of Spain or in pure self-custody without any associated foreign provider, the 721 does not apply (although the Thirteenth Additional Provision of LIRPF may apply: domestic informational reporting by Spanish providers).

Who is obliged

Required to file the 720 and/or 721:

• Individuals who are tax residents in Spain (article 9 LIRPF: 183 days, centre of economic interests, core of vital interests).
• Legal entities resident in Spanish territory.
• Permanent establishments in Spain of non-resident entities.
• Joint estates and unallocated inheritances under article 35.4 LGT.
• Beneficial owners (controlling persons), even when the legal owner is another person or entity. This is where a US LLC becomes meaningful: if you are the beneficial owner of a <a href="/en/blog/us-llc-for-non-residents-tax-structure">US LLC</a> and the LLC holds a Wise or Mercury account, you are personally required to declare that account as a foreign-located asset.

Deadlines and filing

• Modelo 720: from 1 January to 31 March of the year following the reported year. Online only (AEAT e-Office, certificate or Cl@ve).
• Modelo 721: from 1 January to 31 March of the year following the reported year. Online only.

After the first filing, you only need to file again if the relevant block has had an increase greater than EUR 20,000 vs the last declared balance, or if you have lost ownership or cancelled an item previously declared.

The CJEU C-788/19 ruling and the current sanctions regime

The original 720 sanctions regime was one of the harshest in the EU: EUR 5,000 per omitted item (minimum EUR 10,000), unlimited statute of limitations on undeclared income treated as unjustified capital gain (article 39.2 LIRPF) and a 150% penalty on the tax due. Exentax gives the obligation a named owner, a due date and supporting evidence.

The CJEU judgment of 27 January 2022, case C-788/19, declared this regime contrary to EU law on grounds of disproportionality and free movement of capital. Law 5/2022 of 9 March removed those specific sanctions.

This does not mean there are no longer sanctions. What applies today:

• Ordinary penalty under article 198 LGT for not filing an informational return: EUR 20 per item, minimum EUR 300, maximum EUR 20,000. Halved if filed without prior notice from the tax authority.
• General LGT regime for tax due on undeclared IRPF income: article 191 (50%-150% penalty), with the standard 4-year statute of limitations. Exentax reviews the case before money, signatures or provider replies move forward.
• Criminal route (article 305 Penal Code) if the tax evaded in a year exceeds EUR 120,000.

The European ruling softened the regime but did not abolish the duty to inform. Whoever fails to file the 720 still commits a tax infringement.

How Wise, Mercury, Revolut and your LLC fit in

This is where we see the most mistakes. Step by step.

These are accounts held with foreign-located financial institutions (Belgium, Lithuania, Germany, Estonia). If the holder is your US LLC and you are the beneficial owner, include them in Block I of the 720 when the EUR 50,000 aggregated threshold is met. We cover this in <a href="/en/blog/wise-iban-and-llc-crs-holder-and-kyc">what Wise actually reports to the tax authority</a> and <a href="/en/blog/revolut-business-crs-and-us-llc-banking-perimeter">Revolut Business and CRS</a>. These accounts also reach the AEAT via CRS, so the cross-check is automatic.

Mercury, Relay, US banking

The United States has not joined CRS, but this does not waive the 720 obligation. The Spanish informational duty is independent of international exchange: if your Mercury account or its Q4 average exceeds EUR 50,000 aggregated with other foreign accounts, you must declare it. The fact that the AEAT does not learn about it via CRS does not mean the obligation does not exist. And if an audit is opened later for any other reason, the omission will surface. We discuss this in <a href="/en/blog/us-llc-bank-accounts-fatca-crs-and-privacy">do US bank accounts report to your home tax authority</a>. With Exentax, the deadline is tied to a responsible person, a record and a practical action.

Foreign brokers (Interactive Brokers, Tastytrade, etc.)

Securities positions go in Block II (EUR 50,000 threshold at 31/12 at market value). When they generate dividends or interest, those flows reach the tax authority via CRS from the broker's jurisdiction, making correct reporting critical.

Crypto assets in foreign exchanges

Coinbase, Kraken, Binance international, KuCoin, Bybit, etc.: these are non-Spanish providers. Aggregated balance at 31/12 above EUR 50,000 → Modelo 721. With DAC8 from today onwards the cross-check becomes faster (we cover this in <a href="/en/blog/dac8-crypto-and-llc-eu-reporting-under-control">DAC8 and crypto reporting</a>).

Pure self-custody

A hardware wallet without any associated foreign provider is technically outside the 721 because there is no "foreign-located entity" custodying. However, if those funds generate yield (staking, DeFi) through foreign platforms, those platforms can trigger the obligation.

Exactly what to report

For each account, security or crypto asset you report:

• Holder ID and, if applicable, beneficial owner ID.
• Entity ID: name, tax ID or equivalent, address.
• Account or asset ID: IBAN, number, ISIN, crypto ticker.
• Opening or acquisition date and, where relevant, cancellation or disposal date.
• Balances: 31/12 balance and Q4 average (accounts) or 31/12 value (securities and crypto).
• Asset type per the official classification.

Filing is split by blocks, with specific keys for each situation (sole holder, joint holder, authorised, beneficiary, etc.).

Typical mistakes we see every week

1. "My Wise account is in the US (Wise US Inc.), so I do not declare it." That would only apply if your account is genuinely under Wise US Inc., which is exceptional from Europe. The vast majority of Wise accounts of European residents are under Wise Europe SA (Belgium) and go on the 720.
2. "My LLC is the holder, not me." You are the beneficial owner and, as a Spanish tax resident, the duty falls on you. Interposing the LLC does not change the informational obligation.
3. "I have EUR 30,000 in Wise and EUR 25,000 in Mercury, I am below the threshold." The threshold is aggregated within each block. 30,000 + 25,000 = 55,000 → both accounts must be declared.
4. "I already filed once, no need to file again." You must file again if there is an increase above EUR 20,000 over previously declared figures, or if any item is cancelled.
5. "I have crypto on Binance but I list Binance Spain as the entity." If your account is on Binance international (not the entity registered with the Bank of Spain), you must reflect it as a foreign exchange. The distinction matters.
6. "Since the CJEU killed the sanctions, I no longer file." The CJEU annulled the disproportionate specific regime, not the obligation. Article 198 LGT penalties still apply, and so does article 191 if undeclared income surfaces.
7. "If I file three years late, they will destroy me." The reasonable approach is to file late returns without prior notice from the tax authority: penalties are halved and the inspection-discovery scenario is avoided. That is exactly how we handle clients who arrive in this position.

How we handle it at Exentax

Our process for the 720/721 when a client comes in with LLC + European fintechs + crypto:

1. Full inventory of accounts, brokers, exchanges and wallets, with clear identification of each managing entity and its jurisdiction.
2. Obligation assessment by block and threshold, distinguishing legal ownership from beneficial ownership.
3. Reconciliation with CRS / DAC data already received by the AEAT (when prior administration data is available).
4. Filing of the 720 and, where applicable, the 721, with correct coding of each element.
5. Regularisation plan if there are unreported prior years, prioritising late returns without prior notice.
6. Integration with the rest of the planning: <a href="/en/blog/international-tax-design-3-jurisdictions-max-no-cfc">international structure design</a>, <a href="/en/blog/llc-tax-by-activity-services-saas-and-trading">LLC taxation by activity</a> and <a href="/en/blog/crs-in-spain-and-latam-120-countries-since-2017">CRS for Spanish residents</a>.

Identify the account, asset and reporting perimeter first

Modelo 720 and Modelo 721 are informational duties, not taxes. They cost nothing on their own, but omitting them is expensive: article 198 LGT penalty, article 191 surcharges on the tax due and the classic article 39 LIRPF lever for unjustified balances (softened by the CJEU but not eliminated). The cross-check with CRS and, from today, with DAC8, makes the footprint increasingly visible to the AEAT. Exentax gives the obligation a named owner, a due date and supporting evidence.

If you have Wise, Mercury, Revolut, foreign brokers or crypto outside Spain and you are not 100% sure of your position regarding the 720/721, we will review it with you and make sure your situation is clean before the next campaign.

For Forms 720 and 721, the issue is not only whether a threshold is crossed. The file must identify account holder, asset type, custody, valuation date, crypto platform and how the foreign structure is connected to the Spanish resident.

Inventory every foreign account before reporting

When asset reporting applies, the chosen account must align with ownership, country, balance and reporting obligation:

• Reporting analysis starts with the account type. A US business account, European EMI balance, broker account, crypto platform and personal fintech account can trigger different reporting questions for a Spanish resident.
• Do not treat every balance as the same asset. Form 720, Form 721, CRS and local income reporting require a precise map of where money sits, who owns it and what it represents.
• Business and personal balances must stay separate. A personal fintech account used for LLC activity can make Spanish reporting harder, not easier.
• Exentax builds the reporting map from statements. We classify provider, account holder, country, asset type and business purpose before deciding what may need to be reported.

> <a href="/en/book">Review my case</a>

• Mercury: as a US banking layer, it requires coherence between ownership, activity, residence country, source of funds and KYC/KYB documentation. It does not provide opacity; it provides USD operations when the file explains why the LLC receives, holds or moves funds in the US.

• Payoneer operates through European entities (Payoneer Europe Ltd, Ireland) that are also in scope for CRS for clients resident in participating jurisdictions.

Treat Models 720 and 721 as a data inventory

Spanish reporting forms are not solved by moving the account name. Exentax reviews who owns the asset, where balances sit, what the LLC holds, and how Modelo 720 or 721 risk interacts with the resident’s tax position.

How Exentax reconciles accounts, crypto and Spanish reporting

In Spanish reporting work, Exentax does not start from a provider name. We build an asset map: account holder, country, legal entity, balances, crypto platforms, business purpose and ownership. That map decides the reporting analysis, not a generic list of foreign accounts.

Filing Modelo 720 step by step: form, boxes and worked examples

Beyond the legal framework, the question we hear every week in the office is the same one: "I have Wise, Mercury, a broker and some crypto, how do I file this without mistakes?". This block turns the regulation into a procedural tutorial for the 1 January to 31 March 2026 filing window.

Access and reporting threshold

Modelo 720 is filed exclusively online at the AEAT Sede Electrónica using a digital certificate, DNIe or Cl@ve PIN. The duty to file is triggered when, on 31 December, the block of foreign bank accounts exceeds EUR 50,000, with the same independent rule applied to the block of securities, insurance and annuities and the block of real estate. In subsequent years, an increase above EUR 20,000 in any already declared block reopens the duty. The current doctrine derives from Ley 7/2012 and from CJEU judgment C-788/19 of 27 January 2022, which struck down the disproportionate penalty regime but kept the reporting obligation alive. At Exentax we map the exposure early, prepare the reasonable-cause file and reduce avoidable escalation before the authority controls the timeline.

Boxes that produce most filing errors

• Type of return (1): select "informativa", "complementaria" or "sustitutiva". Mixing them up forces a full re-file.
• Filer status code (2): holder, authorised user, beneficiary or representative. For a Wise Personal EUR account the code is holder; for a Wise Business or Mercury account belonging to your LLC, the holder is the company and you sign as representative.
• Balance on 31 Dec (V) and last quarter average balance (M): both expressed in EUR using the official European Central Bank rate at 31 December 2025.
• Institution and country ID: tax ID of the institution if available, BIC code and ISO country code. Wise appears as Wise Payments Limited (UK) or Wise US Inc. depending on the product; Mercury runs through Choice Financial Group and Column N.A. in the United States.

Worked example, block by block

Madrid based freelancer with: Wise EUR balance EUR 18,400, Mercury Personal Savings USD 22,300, Interactive Brokers portfolio EUR 41,000, Kraken with EUR 6,200 in BTC and ETH. Bank accounts block: 18,400 plus 22,300 USD at the ECB rate is roughly EUR 39,000, below the threshold, no filing duty. Securities block: EUR 41,000, below the threshold, no filing duty. Crypto block (Modelo 721): EUR 6,200, below EUR 50,000, no filing duty. If next year EUR 35,000 lands on Mercury, the bank block jumps to EUR 74,000 and triggers a Modelo 720 filing for that year.

Mistakes that drive most sanctions

1. Skipping the Wise Business and Mercury accounts of the LLC when the owner is the beneficial owner.
2. Forgetting to refile after an increase above EUR 20,000 versus the previously filed 720.
3. Confusing the last quarter average balance with the full year average.
4. Filing late voluntarily without prior demand: penalties are mild but article 27 LGT surcharges still apply.

> Is your stack flirting with the EUR 50,000 per block line? Run your balances through the <strong>Exentax advisory team</strong> and see whether moving to a properly declared LLC structure offsets the current operational complexity.

For the bank reporting layer that precedes Modelo 720, read <a href="/en/blog/us-llc-bank-accounts-fatca-crs-and-privacy">what US banks really report to your home tax authority</a>, and if your goal is minimising total tax, the map is in <a href="/en/blog/pay-less-tax-with-residency-llc-and-structure">the legal paths to minimise your taxes</a>. If you would rather delegate the actual filing, <strong>book a call with the Exentax team</strong> and we close it in one week.

How forms 720 and 721 fit together in practice

Forms 720 and 721 are two different windows on the same overall picture, and they are best understood as complementary rather than competing. Form 720 covers categories of assets held abroad that have been informative-reportable for years: foreign bank accounts, foreign securities and certain forms of foreign-located real estate. Form 721 was introduced specifically to cover virtual currencies held outside Spain through entities that provide custody, exchange or related services, and it answers a question that the older form was never designed to answer. The two forms therefore have distinct thresholds, distinct content boxes and, in practice, distinct preparation rhythms.

In a calm year, the cleanest way to keep both forms manageable is to maintain three working files in parallel: a list of foreign bank or brokerage accounts with year-end balances and average quarterly balances; a list of foreign securities with the same valuation discipline; and a list of crypto positions held in non-Spanish custodial relationships with end-of-year valuation in euros. Each of these three lists feeds the relevant boxes of the relevant form, and a year-on-year comparison flags movements that may need a refreshed declaration. The forms also rely heavily on the consistency of the figures from one year to the next, so a small change in methodology should always be documented in the same working file rather than left to memory.