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Information return on assets and rights held abroad for residents in Spain to be fulfilled by 31th march

Information return on assets and rights held abroad for residents in Spain to be fulfilled by 31th march

Those who are tax resident in Spain (both local Spanish residents and expats resident in Spain) are legally obliged to provide information to the Spanish tax authorities regarding any offshore accounts, offshore investments, and real estate located abroad.

Although this declaration of assets and right abroad is solely informative and no tax is charged, failure to file, late filling or false information could result in serious consequences.

The deadline is the 31st of March each year.

Therefore every natural or legal person resident in Spain who have any assets outside Spain with a value of 50,000 € or more is required to submit this Form 720 to the Spanish Tax Authorities.

The declaration may be made on line through the following webpage: www.agenciatributaria.es

You must complete this form if you are a Spanish resident with assets outside of Spain value over 50,000 € in case of:

  1. You are a new resident in Spain and this is your first tax year.
  2. You completed the Form 720 on a previous year, but your assets have increased by 20,000€ or more of total assets in any of the groups previously referred to, or that have reached more than 50,000€ in a previously undeclared category in the current year.

The total value of assets should be 50,000€ or more in each or any one of the categories.

Each one of the three groups of assets represents a different reporting obligation, but the three reporting obligations are expressed using the same information form. As a result, the three reporting obligations are complied with using Form 720, where taxpayers must report all assets and rights for which there is an obligation to report.

Each of the blocks of information below is a different reporting obligation:

  • Accounts in financial institutions abroad. This reporting obligation is governed by Article 42 bis of the General Regulations on the actions and procedures of tax management and inspection and on implementation of the common rules of procedures for the application of taxes, approved by Royal Decree 1065/2007, of 27 July. (In form 720, it corresponds to the value of the ‘Type of asset or right code’ ‘C’).
  • Securities, rights, insurance and income deposited, managed or earned abroad. This reporting obligation is governed by Article 42 ter of the above-mentioned General Regulations approved by Royal Decree 1065/2007, of 27 July. (In form 720, it corresponds to the values of the field ‘Type of asset or right code’ ‘V’, ‘I’ and ‘S’).
  • Real estate assets and rights on real estate situated abroad. This reporting obligation is governed by Article 54 bis of the General Regulations approved by Royal Decree 1065/2007, of 27 July. (In form 720, it corresponds to the value of the ‘Type of asset or right code’ ‘B’)

So, if you have 2 properties valued at 30,000€ although the value individually would be below the threshold, the total value of both would be 60,000€ thus exceeding this limit, and therefore subject to this new declaration, necessitating the completion and filling of Form 720. However, if you have a property valued at 30,000€ and shares valued at 30,000€ as they are separate categories and each value does not exceed the 50,000€ then you would not be required to make a declaration.

Once Form 720 has been filed with regard to one or more of the disclosure obligations in it, this Form should only be filed again when, in relation to one or more of these obligations, there is an increase of the overall limit established for each information block above 20,000€ compared with what the last declaration determined.

Example:
Form 720 is filed during fiscal year 2013, with respect to the information of fiscal year 2012. In this Informative Tax Return, bank accounts in financial institutions located abroad and properties abroad with the following balances and values were disclosed:

Balance of the last quarter 2012 Balance at 31/12/2012
Account nº 1 40,000 45,000
Account nº 2 15,000 12,000
TOTAL OF THE BALANCES 55,000 57,000

 

Cost price
Property nº 1 50,000
Property nº 2 20,000
TOTAL value 70,000

The obligation to file the Informative Tax Return, Form 720, shall return in successive periods whenever an increase occurs in the overall limit established for each information block above 20,000€ compared with what the last declaration determined.

If in fiscal year 2013 the values of the properties are not substantially changed (and there is also no other cause for it to be filed, such as would be its sale), the overall balance of all accounts in the last quarter increases by 15,000€ and the overall balance of all accounts as at 31 December increases by 18,000€, such that the total balances are as follows:

Fiscal year 2013
Balance of last quarter 2013 Balance at 31/12/2013
Account nº 1 20,000 18,000
Account nº 2 40,000 23,000
Account nº 3 10,000 34,000
TOTAL OF THE BALANCES 70,000 75,000

The increases experienced in the overall balances of the accounts have been as follows:

Increase of the overall balance in the last quarter Increase of the overall balance as at 31 December
Increase versus fiscal year 2012 15,000 18,000

In fiscal year 2013 there will no obligation to file Form 720, with regard to the obligation to disclose properties abroad. Neither is there an obligation to file Form 720, with regard to the obligation to disclose information on accounts in financial institutions located abroad since the (total) overall balance in the last quarter and the (total) overall balance as at 31 December have not increased by more than 20,000€ compared with the amounts identified by the obligation to declare in the last fiscal year it was filed, in this case in the prior year (provided that no other cause requiring it to be filed also arises, as would be the case for example the transfer or where applicable cancellation of any of them).

Fiscal year 2014: If in fiscal year 2014 the overall balance of all accounts in the last quarter increases by 2,000€ and the overall balance of all accounts as at 31 December increases by 10,000€. The increases of balances for each year and in total are as follows:

Increase of the overall balance in the last quarter Increase of the overall balance as at 31 December
Increase versus fiscal year 2012 15,000 18,000
Increase versus fiscal year 2013 2,000 10,000

 

Increase versus the last fiscal year in which a declaration was filed due to this information disclosure obligation (Article 42 bis of the General Regulation approved by Royal Decree 1065/2007) 17,000 28,000

The increase that must be taken into consideration is the increase experienced in the overall balance of the last quarter and of the overall balance as at 31 December compared with the balances identified by the obligation to declare accounts in financial institutions located abroad in the last fiscal year in which it was filed.

In this case, the increase of the overall balance as at 31 December 2014 compared with the overall balance as at 31 December of the last fiscal year in which a declaration, Form 720, was filed due to this information disclosure obligation, has been above 20,000€, so in fiscal year 2014 an Informative Tax Return, Form 720, shall be filed due to the obligation to disclose information on all accounts in financial institutions located abroad.

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