Tax regulations and links to understand how to fill new Spanish tax form-720.
Form 720: Declaration of Assets Abroad. This form must be filled by all spanish residents owning assets abroad over 50.000 euros. This obligation must be fulfilled during first quarter of each year. Although this first year it is possible to fill until April 30th 2013.
- Link to official text of the regulation: http://www.boe.es/boe/dias/2012/11/24/pdfs/BOE-A-2012-14452.pdf
- Link to Ministry Order 72-HAP-2013 governing the presentation of form-720
- Link to government web-application for filling form 720: https://www.agenciatributaria.gob.es/AEAT.sede/tramitacion/GI34.shtml
- Instructions model 720. Design of model and fields
- Official exchange rates that should be used for assets nominated in non euro currencies: BOE-Bank of Spain resolution
In the model must be declared,
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accounts abroad in financial institutions,
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stocks, bonds, values, financial rights, and savings in insurance companies, deposited, managed or obtained abroad
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all types of Real Estate and rights over Real Estate abroad.
Each of the three blocks of goods, constitutes an obligation of different information to be provided, but the three reporting obligations are articulated through the same form. In this way three reporting obligations would be fulfilled by completing the form 720 informing all goods and rights with respect to the obligation to inform
It is excluded from this obligation to declare when the value thereof does not exceed 50,000 € for each type of assets. The presentation in successive years, after presenting form 720 for the first time will be mandatory when the value declared increases by more than 20.000 €.
The Declaration includes a record for each property situated abroad. For each record indicating its type and subtype:
‘C’:Accounts opened in banking or credit entities located abroad.
- Current account.
- Savings account.
- Term deposits.
- Credit accounts.
- Other accounts.
·”V”: Securities or rights located overseas representative of participation in any type of legal entity, values located overseas representative of the transfer of capital to third parties or provided for its management or administration to any legal instrument, including trusts and “trusts” or mass though lacking legal personality, capable of acting in the course of trade.
- Values or rights of participation in any type of legal entity. As shares and participations in companies.
- Representative values of the transfer of capital to third parties. Bonds …
- Values provided for its management or administration to any legal instrument, including trusts and “trusts” or mass heritage which, though lacking legal personality, capable of acting in the course of trade
· ‘I’: shares and participations in share capital or equity fund of collective investment institutions located abroad. In this case there is no subtype.
· “S”: life insurance (savings not risk) or disability and pension time or annuities, whose insurance companies are located overseas.
- Insurance life or disability, whose insurance company is located abroad.
- Temporary or life income generated as a result of the deposit of capital, abroad.
· “B”: ownership and real rights over properties located abroad.
- Ownership of the property.
- Actual use or enjoyment and bare ownership rights over real estate.
- Timeshares, timeshares shifts, part-time property or similar formulas on real estate.
- Other rights in rem over real estate. In this case you must describe it.
It must file a return if any of those paragraphs (1:C, 2:V, I, S, or 3: B) exceds the figure of 50,000 euros, and only those sections in which the figure is over 50,000 euros.
Information to provide
Information to supply include, open accounts in financial institutions, the balances of these accounts on December 31st, the average balance for the last quarter of the year and the date of opening. All holders, authorized… at 31 December shall declare the balance at 31 December and average balance. … Authorized holders who have ceased to be during the year, indicate only the balance of the day ceased to be holders, authorized…
In terms of the ownership of the account should be indicated if the declarant is:
- Holder
- Representative
- Authorized
- Beneficiary
- Usufructuary
- Taker
- With power of disposal
- Other forms of real property
In the case of Real Estate shall include the date and the value of acquisition, and the date of opening or cancellation of right over Real Estate and, in the case of values, rights, insurance and income deposited or managed abroad, the balance at 31 December of each year. And where appropriate the amount of transfer or sale.
The breach of this obligation has consequences on income tax and corporation tax.
Assets not declared, that cannot be proved its ownership arousing from declared income or assets, will be considered income to be taxed, and a 150% punishment over the value of them.
Penalty for not filling, filling incomplete, filing with non accurate data, will be punished with 100 euros per data with a minimum of 10.000 euros.
Cooperation with other States
On the other hand, Royal Decree approved today partially to Spanish law transposes the Community directive on administrative cooperation in the field of taxation. Thus, reinforcing cooperation in the exchange of information between countries needed for the liquidation of taxes.
Among other issues, is attributed to the tax agency competition to formulate requests for mutual assistance to other States or international organizations. This provides legal security to be achieved greater agility in the process of mutual assistance.
And already a few years ago the tax agency began to provide tax information for citizens of the EU to their respective countries through the model 299 which is filled by Spanish financial institutions, collected and processed by Tax Authority, and information send to respective countries.
The Government aims to deepen in the coming months in this type of agreements for the exchange of information, both to improve the collection of taxes, and to enhance the fight against tax fraud.
Example of filling in data for a current account
Frequently asked questions:
Important note: the obligation to submit a declaration in the case of co-ownership of a good, relies on the value of the asset, not in the value of the percentage owned.
the following questions and answers are taken from the AEAT website:http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/Declaraciones_informativas_2012/_INFORMACION/Ayuda/Preguntas_frecuentes__Modelo_720/Obligacion_de_declarar/Obligacion_de_declarar.shtml
1.-Must be filed a Form 720 when ownership of a bank account abroad is shared and whose balance at 31 December exceed the €50.000, but whose ownership corresponds to several people?
- There is a reporting obligation on the bank account when this limit is exceeded (if none of the other exceptions to the obligation to declare apply) regardless of the number of the account holders. Must be informed total balances, indicating the percentage of participation.
2.-Must be filed a Form 720 when sharing ownership of Real Estate located abroad whose acquisition value exceeds the €50,000, at 31 December but whose ownership corresponds to several people?
- Yes, there is a reporting obligation on the property when this limit is exceeded (if none of the other exceptions to the obligation to declare apply) regardless of the number of owners. Must be informed total acquisition value, indicating the percentage of participation.
3.-If a person ceases to be authorized in an account of a financial institution located abroad on June 2012 must file form 720? in that case, which has to be balance and the date to be reported?
- There is obligation to declare if the balance that existed in the account on the date of the revocation of the authorization, if happened by the end of year would had determined obligation to declare by 31 December.
- The content of the Declaration in connection with this account in the event that there is obligation to declare it must inform about:
- Business name or full name of the Bank or credit as well as his home.
- The complete identification of the account.
- The date of the revocation of the authorization.
- The account balance at the date in which I leave be authorized.
4. Do I need to declare pension schemes contracted abroad?
- There is no obligation of information about pensions plans (for contributions to them or capital into them) as long as is not fulfilled the requirement that is covered by the scheme and capital is withdrawn.
5-When an individual moved abroad once started the exercise and must file the tax on the income of natural persons by this exercise. Are you required to file also the information model with respect to the property and rights abroad?
- Yes, provided in accordance with the regulation of these three obligations of information is obliged to fill form 720
6.- If a person is the “owner” of an account abroad whose balance at 31/12 is € 40,000 and is also “authorized” in other current account whose balance at 31/12 is €30,000, there is obligation to declare?
Yes, provided that no if no cause of exoneration.
7. Form Field “Tax Number in the country of fiscal residence”. There are no instructions what should be put in this box?
The instructions on how to fill concrete boxes are in the link that is up on the design of the model 720 records:
- It will indicate the tax identification number of the entities declared in the previous field, assigned in the country or territory of residence tax.
- This field will be blank when the “type of asset” take the value “B”.
Example: in the case of an account in the Bank Espirito Santo of Portugal, will be the VAT Number of this entity in Portugal.
8. Do I need to declare asset which have been sold during the financial year, and before 31 December has been reinvested in other assets?
No. When the loss of the status of owner or real owner referred to in the last paragraph of article 42 ter.1 have his origin in the transmission of values and rights, and the amount obtained had been entirely used in the acquisition of other securities or rights which must be declared, You only must declare balances at 31 December.
9. What exchange rate is used to value goods in foreign currency?
- The European Central Bank official exchange rate will be used at December 31, for the balance at 31 December and for converting into euros fourth quarter average balance. BOE-Bank of Spain resolution
- In the case of cancellations of accounts, the official rate on the date of cancellation will be used.
- In the case of real estate, the value of acquisition, as well as in the rest of goods and rights subject to Declaration, must conform to the exchange rate prevailing on the date of December 31 for the year corresponding to the declared information.
This is a really helpful site for the 720. Just one very specific question, I moved to Spain in January 2013 and will remain here for a year and a half. I started paying Spanish taxes in Jan 2013-do I still need to complete a 720 or would I need to do this next year?
Many thanks!
720, is for Spanish resident.
Now we are filling form 720 for year 2012, and as this year you was not resident you dont need to fill.
But next year you will need to fill during first term 2014 form 720 for tax year 2013 (in Spain tax year is calendar year)
I thought as much-however have been getting very mixed messages. Thank you for your response!
All the best.
Excellent Q&A and very helpful.
re Form 720 I would be grateful answers on the following:
1) The form asks for valuations/bank balances as of 31/12/2012 AND the average value/bank balance during the last quarter. I have no problem providing the former, but the latter (average during last Q) are not provided in UK bank and investment valuation statements. Is it obligatory, or good enough to provide values for year end? If obligatory, where am I supposed to get this info? Do they really expect the average of 90 different stock prices in the case of equities/bonds/collective investment vehicles?
2) If I don´t have ISIN codes for each investment holding is it acceptable to give the number of holdings (no further detail) and the name and address of the broker who holds them in custody? eg XYZ broker, address, and 15 holdings
Thank you and looking forward to your reply.
Average balance is just for bank accounts.
brokerage accounts are not declared, what is declared in this case are individual assets within brokerage account.
Average balance for bank account: you can obtain ading balances by the end of Sept Oct Nov Dic and dividing by 4
2.- for assets, you need to fill a record for each one, with at least:
Thank you for your answers. As a further question to your answer on 2, average value during Q4 is not required? I was thinking of taking the values as at 30/9/13 (which I have) and 31/12/12 (which I also have), and dividing by 2, if necessary. But if not required at all that is great.
Average value is required for all accounts. take sept oct nov & dec add up and divide by 4
I am a bit muddled. In my your first reply to my questions of 22/4/13 you listed the information required for investment assets: (stocks/shares/funds) but average price during Q4 was not included in that list. I replied to that asking if your list meant average price is not a requirement, and your reply to that states that it is. Please clarify if obligatory or not. I had understood from your reply that they require it for bank balances, yes, but not for fixed income stocks/equities/investment funds. To get it is a lot of work which I don´t actually have time for except being up all night!! And I can´t see why they need it.
Many thanks,
average for Q4 is just required for bank accounts, but not for other assets
Hello,
I would like to clarify, even if I am the owner of a property, but have a mortgage outstanding that is approx 90% of its value, do I still have to delcare this? Im the owner but my actual capital is only 10k.
Thanks
Yes, even if mortgage is 100%.
Value to declare is the acquisition value, no matter if you paid cash o got a mortgage for 100%.
Hi Javier,
Seems like I have been presenting the borador della renta by mistake for the last 4 years because I worked only for 1 month in spain but I never gave up my residence in
Uk as I spend only few months each year here in spain.I live in a rented house while in spain and have resident bank accounts here as well.
shall i get a certificate of fiscal residence in uk and present it to agencia tributaria along with a letter explaining this misunderstanding or I should fill up the module 720?
thanks,
david
get this certificate from HMRC, and this year dont make the mistake of filling borrador. Do that and dont fill 720
shall i get a certificate for 2012 or one for all the 4 years or both?
thanks again…
You want no to present form 720 for year 2012, get certificate for year 2012
You want not to pay taxes as Spanish residente one year, get certificate for this year.
Thank you for a great source of information regarding filling in modelo 720.
I have had 2 differing opinions for the treatment of an English interest in possession trust, where the trustees are UK resident and the beneficiaries are Spanish residents, and I wonder what your opinion is. The beneficiaries have no rights to the capital, only to income generated from that capital. Should the assets held in trust, and legally the property of the trustees, be declared?
Potential Beneficiary (you will be beneficiary in the future), do not declare.
but if you are already effective beneficiary, you declare a value equivalent to capitalization at 4% of income received last year.
In this case you declare the trust, for capitalized value, and you dont declare any of the trust assets.
Thank you for your reply. Very much appreciated.
In English this time.
Thank you for this excellent and very useful forum.
I have filled out the declaration, and once I have uploaded it I get a message informing me that I can sign and send the form.
When I do it the message doesn’t go through and I am notified of a failure by means of the following message:
Failed to mount: “undefined” is not an object
Time is running out and I’m starting to get worried.
Any suggestions, please?
search “configurador AEAT” and excute this program, seams that electronic signature is not working.
If configurador solution do not Works, send to me the file ending .720 (file produced when you press EXPORTAR) and I will present it for you.
I am not retired. I moved my UK pension to an off-shore insurance company. They are the owner and I am the beneficiary. I am not taking any income. Do I need to declare it.
Yes as insurance (clave S. seguros, sub clave 1) for the surrender value
On the 27/12/2012, the Catalan government lowered the level for exemption from the wealth tax to 500, 000 € for the fiscal years 2012 and 2013. The level in the rest of Spain remains at 700,000 €.
I have two questions as regards real estate:
I have among my assets the “bare ownership ” of properties located in France. The person with usufructuary rights receives all revenues generated by these properties, declares their “full ownership”, as required under French law, and subsequently pays the wealth tax on them in France. If I were also to declare these properties as part of my ‘patrimonio’ (their value at acquisition is 205, 000 €), combined with the other assets I have, I too would be liable for the Catalan wealth tax. Surely two separate people, albeit they declare in different European countries, cannot both pay wealth tax on the same property ?
Next question :
I co-own a house with my husband in France. The value at acquisition was 210,000 €. As we share the ownership, which amount will be taken into account when calculating my liability for the wealth tax: the total value of the house or the value of my share of the house (105, 000€) ?
And lastly,
Despite my assets I have an annual income of around 6,000 €. In France, the total taxation due (wealth tax included) must amount to no more than 75 % of income. Is there the same rule in Spain (or Catalonia?).
I would much appreciate your help.
Thank you.
You need to declare but from the amount to pay you can deduct the part of French wealth tax corresponding to bare property.
Value for the house is total value, 210.00, and at the end you tell that you have 50%
Yes. The rule is that income tax plus wealth tax cannot exceed 60% of your income. If 60% limit is exceeded, you will reduce wealth tax until what firs happens 1.- limit is fulfilled
2.- or reduction on wealth tax reaches 80%
hi..if u have accounts outside the european union..do you have to declare them or are there any countries exempt from this? thank you
You need to declare, everything, anywhere.
Javier,
Many thanks for this excellent web page. I have a question about a portfolio my wife and I own. It has three different securities each of which individually are worth less than €50 000 but collectively are worth more than that amount. The first fund is a mixed asset fund mainly invested in equities, the second is a freehold income trust and the third a cautious mixed asset fund. The portfolio is managed by one company. We do not receive a direct income from the portfolio until it either matures or we cash it in. Do we need to complete a model 720 declaration?
Yes, you do. First and third are declared as funds (V2) and second as trust (V3)
Hello Javier,
I found the information here very good, however I haven’t been able to find out, even from my own solicitor if I need to submit the form 720. My situation is this:-
British national working in middle east , have residencia certificate, due to house in Spain. Do not spend any more than 2 weeks in Spain a year. Only asset mentioned in the list amounting to about 50,000 euros is in fact a house owned by my wife. Not allowed to have in my name as its in Thailand.
Do I need to submit form 720? just declaring what I do have?, if I do how do I do this in Oman where I am now?….
Hope you can help. Thank you.
Having a residence permit in Spain, granted as you are a EU citizen, does not meen that you are tax resident in Spain.
Form must be filled by Spanish tax residents.
As you have a house in Spain, best way to avoid presenting form 720, is to fill form 210 for declaring property presumed income as non resident. And at the same time ask in your country in middle east a certificate of tax residence.
Thank you for your reply Javier.
How can I get a form 210 here in Oman and where to submit, do you know if I contact the Spanish Embassy here that they would be able to deal with this?.. Steve.
Hi Steve,
you can fill online, and print it in pdf for presenting.
https://www2.agenciatributaria.gob.es/es13/h/ie02100b.html?idi=en
But if help is needed you can mail me, I can present it for you.
Javier,
Thanks for the great site and your helpful answers. Here’s my question:
I own a real estate abroad (value >50 kEUR) that I had bought well before becoming resident in Spain (therefore, with income earned in tax years in which I was not a taxpayer in Spain). I pay local (community) tax for that real estate. I do not rent it out.
1. Do I have to declare it in Form 720?
2. Do I still have to pay a “presumed” income tax (IRPF) on [Value X 50% X 1.1%] despite paying local tax on it? Does it change anything that it is a community tax, not an income tax?
2a) If I do have to pay IRPF on it, should I pay it for every single year that I am resident in Spain (by filing a “Complementaria” for every year that I have spent in Spain without declaring this real estate)?
2b) If I do not have to pay IRPF on it, which is the legal source for this exemption (for my references)?
Thank you so much in advance
As now you are Spanish resident you need to fill form 720.
Local tax is equivalent to Spanish IBI, but also you need to declare in IRPF (income tax) this presumed real estate income.
You should declare for all the years you were Spanish resident and are not yet expired. Not expired tax years are 2008 2009 2010 and 2011.