WHAT IS MODELO 720?
If you are resident in Spain, you will have to declare your foreign assets before March, 31th in case the value of these assets exceeds certain minimum amounts. The declaration 720 has an informative character, no taxes have to be paid.
Nevertheless, not declaring when obliged to do so is considered as fraud by the Spanish Tax Authorities and hefty fines can be imposed. There is no period of prescription for this declaration, meaning that these fines will remain applicable in the future.
Even though this declaration does not lead to the payment of taxes, the Tax Authorities may use the information for further inspections. If any inaccurateness in previous tax returns is corrected on your own initiative, potential fines may be reduced.
AM I OBLIGED TO DECLARE?
A declaration needs to be submitted if you own or control assets outside of Spain in one or more of the below categories and their value exceeds 50.000 euro.
The determination moment of value is the balance on the 31st of December and the average value over the last quarter. There is no need to submit the declaration, if:
A declaration must be submitted in the following cases (amongst others):
The overall purpose of this declaration is get visibility on capital held outside of Spain, registered in your own name or registered to others, and which might not be declared in Spain. The above mentioned examples are therefore limited and in case of doubt we advise you to contact us.
WHAT INFORMATION MUST I PROVIDE?
For all types of bank accounts, deposit accounts, etc., amongst others:
For property, rights, usufruct, time-sharing, shared property, etc., amongst others:
For shares, bonds, participations in investments funds, etc. amongst others:
WHAT ARE THE FINES IF I DO NOT PRESENT?
Penalties can be significant. The penalty for not filling can be €5,000 per datum (minimum of €10,000). The penalty for late, filing an incomplete form or filing with inaccurate data is €100 per datum (minimum of €1,500). The penalty for undeclared assets can be up to 150% of the value of the assets.
The penalties are so steep that the EU has initiated proceedings against Spain, deeming that the fines are excessive and that impede the free movement of persons and capital, which is a one of the fundamental principles of the European Union. However, for the time being, the issue remains unresolved.
HOW DO I FILE MY DECLARATION?
The required information per asset is extensive and obligatory by the Spanish tax authorities so check if you have all required information to gather any missing items on time. The requested information typically needs to be provided in February in order to prepare and file the declaration before the deadline on March 31st, so contact us on time!
It is also important that you have a contact address in Spain. The Spanish Tax Authorities often check the validity of the data in the tax declaration and failure to provide a timely reply may lead to an unilateral interpretation of facts accompanied by fines and sanctions. We can offer you the possibility to use our address and contact details in case of need.
If you are resident in Spain, you will have to declare your foreign assets before March, 31th in case the value of these assets exceeds certain minimum amounts. The declaration 720 has an informative character, no taxes have to be paid.
Nevertheless, not declaring when obliged to do so is considered as fraud by the Spanish Tax Authorities and hefty fines can be imposed. There is no period of prescription for this declaration, meaning that these fines will remain applicable in the future.
Even though this declaration does not lead to the payment of taxes, the Tax Authorities may use the information for further inspections. If any inaccurateness in previous tax returns is corrected on your own initiative, potential fines may be reduced.
AM I OBLIGED TO DECLARE?
A declaration needs to be submitted if you own or control assets outside of Spain in one or more of the below categories and their value exceeds 50.000 euro.
- Bank Accounts and Deposits, including Crypto Currencies
- Property and Property Rights on Real Estate
- Pension Funds and other Financial Rights
- Shares, Stocks, Bonds, Values
- Insurances
The determination moment of value is the balance on the 31st of December and the average value over the last quarter. There is no need to submit the declaration, if:
- The value of your total assets abroad exceeds 50.000 euro, but in none of the mentioned categories separately (bank, real estate, rights) the value exceeds 50.000 euro.
- None of the categories show value changes of more than 20.000 euro in comparison to the last declaration.
- The (‘Beckham’) expat scheme is applicable, and you are considered non-resident for tax purposes.
A declaration must be submitted in the following cases (amongst others):
- If you have submitted a 720 form in previous years and the value in one of the categories has increased with more than 20.000 euro in comparison to the last declaration.
- If your share is less than 50.000 euro, but the total value of the asset abroad is more. Example: a joint bank account with a total balance of 60.000 euro, both parties need to present a declaration, even though your ‘own’ share is < 50.000 euro.
- If you have been empowered or authorized, if you enjoy the usufruct or if you own properties abroad in any other way (beneficiary, representative, etc.). Example: you are empowered on a foreign bank account in your parents name with a balance of 60.000 euro.
- If you have properties of which the purchase price exceeds 50.000 euro (also if the purchase price -/- mortgage value is less than 50.000 euro).
- If you have sold your property abroad last year, you closed your bank account; your power of attorney has been cancelled, etc.
- If you have a participation in a holding company with assets abroad, these assets will need to be declared as well.
The overall purpose of this declaration is get visibility on capital held outside of Spain, registered in your own name or registered to others, and which might not be declared in Spain. The above mentioned examples are therefore limited and in case of doubt we advise you to contact us.
WHAT INFORMATION MUST I PROVIDE?
For all types of bank accounts, deposit accounts, etc., amongst others:
- Details bank: Name, address and tax number.
- Account number, IBAN, BIC.
- Date opening (day, month, year) account or obtaining authorization.
- Balance 31st December and average balance last quarter.
- Bank accounts without or with negative balance also need to be declared.
For property, rights, usufruct, time-sharing, shared property, etc., amongst others:
- Specification: urban or rustic
- Address: country, city, street, number
- Acquisition date (day, month, year)
- Acquisition price (including taxes)
For shares, bonds, participations in investments funds, etc. amongst others:
- Name and address of the company, person, entity, etc. to which the rights relate.
- Value per 31st December, divided per right / share / etc. (value and number).
WHAT ARE THE FINES IF I DO NOT PRESENT?
Penalties can be significant. The penalty for not filling can be €5,000 per datum (minimum of €10,000). The penalty for late, filing an incomplete form or filing with inaccurate data is €100 per datum (minimum of €1,500). The penalty for undeclared assets can be up to 150% of the value of the assets.
The penalties are so steep that the EU has initiated proceedings against Spain, deeming that the fines are excessive and that impede the free movement of persons and capital, which is a one of the fundamental principles of the European Union. However, for the time being, the issue remains unresolved.
HOW DO I FILE MY DECLARATION?
The required information per asset is extensive and obligatory by the Spanish tax authorities so check if you have all required information to gather any missing items on time. The requested information typically needs to be provided in February in order to prepare and file the declaration before the deadline on March 31st, so contact us on time!
It is also important that you have a contact address in Spain. The Spanish Tax Authorities often check the validity of the data in the tax declaration and failure to provide a timely reply may lead to an unilateral interpretation of facts accompanied by fines and sanctions. We can offer you the possibility to use our address and contact details in case of need.
