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,
-
accounts abroad in financial institutions,
-
stocks, bonds, values, financial rights, and savings in insurance companies, deposited, managed or obtained abroad
-
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.
Sorry I now have the answer to my previous question – all accounts have to be reported but do have another question:
Regarding point 8 above if the money from a bond or deposit which was cancelled during 2012 was put in a current account which is going to be reported, does the cancelled investment have to be reported too. It does say ‘reinvested’ but does a current account class as reinvestment?
Thanks
Any asset sold, cancelled, closed or Shell before the end of 2012 is NOT declared.
Thanks Javier that’s what I thought, question 8 of the AEAT FAQ makes this quite clear (reproduced below) but what I don’t understand is why you have the option to report a cancelled account or whatever when this is the first time to report – is it for next year? And why is everything you read saying you have to report cancellations?
I have read here in your forum that you have said pensions should not be included but I think most people are referring to a pension fund they have paid into in the past with an old employer or insurance company and is sitting in the UK until the day they retire and will buy an annuity. These should be included shouldn’t they? (“S”: Seguros de vida o invalidez y rentas temporales o
vitalicias, cuyas entidades aseguradoras se
encuentren situadas en el extranjero.)
Thanks once again Javier
Pregunta 8: ¿Se debe informar de la cancelación de las titularidades anteriores a 31 de
diciembre del ejercicio 2.012?.
Respuesta: No se existe obligación de informar sobre las titularidades que se cancelen
antes del 31 de diciembre de 2.012.
Ejemplo 1: Una persona/entidad residente era titular de una cuenta en el extranjero que
cancela el 1 de agosto de 2.012 con un saldo de 100.000 €, ¿tiene obligación de informar
sobre esta cuenta?.
Respuesta: No, no tiene obligación de informar puesto que a 31 de diciembre de 2012 no
existe obligación de informar sobre la misma.
Hi
If a person has one current account in the UK with more than 50,000€ and several others with an accumulated balance of less than 50,000 is it necessary to list all the accounts on the 720 or just the one which exceeds the limit?
Thanks
as all together exceed 50.000 you need to declare all of them, even the ones not reaching 50.000
I just found out about this regulation yesterday. I have two accounts in the USA which are both retirement accounts. One is an IRA–Individual Retirement Account– and one is a 403B/401K– tax-deferred retirement savings account. Both have more than $50,000. The money was accumulated over many years, though I haven´t added any money in at least 8 years. I have not yet reached the age to withdraw any money without penalties. I haven´t withdrawn anything. Do I have to file this declaration? Thank you! Gracias!
For this assets (IRA and 401K) in your case you do not need to fill form 720
Hi,
I have obtained a Solicitud de Certificado for myself so that I can now submit the form 720 by internet. Can I also submit form 720 on behalf of my husband as he will not have the time to obtain the Solicitud before the Tuesday deadline, or, will he have to submit himself or through a Gestor
Thanks
Jacq
Im sorry, but not, for him, he will need his own certificate. You will need help of some gestor
FIRST IF I AM PRESENTLY IN SPAIN FOR 185 DAYS DYE I HAVE TO FILL OUT THE 720 FORM
If you was during 2012, more than 183 days, and you cannot prove that you was resident in other country, that means that you was resident in Spain in 2012, so you need to fill form720
I am resident in spain and own a property (house) in sweden which was bought 1989 for less than € 50 000. The purchase price is less than the swedish latest issued “Valor Catastral” which is more than € 50 000.
Do I have to declare it?
Best regards
Kare Berg
Not, because acquisition value was under 50.000
FOR SWEDISH IMPORTANT NOTICE: AEAT has recently received data from Skatteverten since 2008, if you are resident in Spain declare with complementarias not declared income from Sweden. If you declare before receiving official notice, you will have not penalty
Javier,
If I dont have assets in access of 50K€ do I still need to file the 720?
you only fill if you assets exceeds 500.000
Javier,
I have been watching your informative blog with great interest. Forgive me if I ask something off the point of the 720. We just had lunch with a group of retired expat friends. Discussion of the 720 moved on to discussion of taxation in general. There appeared to be a huge difference as to what tax people were paying on their pensions. We all use different gestors, we all get UK private pensions and/or state pensions not taxed in the UK. Some of us are taxed separately, some jointly with husband/wife. Please could you settle the issue by telling me what the tax free allowances are on pension income for those aged 60-65 and over 65.
Hi Javier,
This is my case:
I’ve just moved to Spain from Italy.
I ‘ve been hired by a Spanish company and I’ll start working for them on May 2nd, 2013.
I got my empadronamiento and my NIE one week ago (April 19th, 2013).
I own a house out of Spain and the value is more than 50000 euros.
Do I have to fill in and send the Modelo 720 this year (by the end of April 2013)?
Or do I have to send it only starting from next year (by the end of March 2014)?
Many thanks,
Stefano
Not because you was not resident 2012.
But next year you will need to fill because you will be resident during 2013 in Spain.
Hi,
I moved here in January, do you know if this for calendar year? (i.e. am I ok to wait until next year too?)
If you moved to Spain in 2013, during 2012 you was not resident in Sñain so you dont need to fill form 720
Good afternoon,
Yesterday I asked about declaring ISAs and I guess my question has got lost in the pile, so I hope you will forgive me for asking again: I have a stockbroking account and 2 sub accounts: 1 normal the other for my ISAs. Some of the holdings in each sub-account are duplicated eg. I hold Lloyds bank in each.
i) do I have to declare ISA holdings in Modelo 720 (they are tax free investments and therefore neither the owner of the shares nor the administrative entity (ie stockbroker) are required to submit any info. regarding them to the UK tax authorities)?
ii) If I am required to declare them in Modelo 720 do I declare the holdings separately – ie x shares in Lloyds in investment account and y shares in Lloyds in ISA account?
Many thanks,
ISA is tax exempt for UK residents, but not for Spanish residents. Bank should have informed you about this fact.
You are required to declare all of them, joint or individualy. In this case I fill 2 records because for me is easyer to check amount, if it is joint will not mach individual amounts with bank statement, its up to you.
Good morning, thank you for your reply. I invested in ISAs before I came to work in Spain so they are long term investments from years ago, like all my other non spanish savings. Does the tax agreement between Spain and UK not respect the different conditions of products if invested in PRIOR to changing residence? The brokerage/investment institution who administer my investment holdings does not provide an annual income statement on PEPS/ISAs, only for taxable products. I look forward to your reply and thank you.
If you check you ISA contract you will see that tax exemption is limited for UK residents, moreover as non resident you cannot put money into it.
As you cannot put money into them income is balance at the end of 2012 minus balance at the end of 2011.
Good afternoon and thank you for your reply. I am not clear on what you means when you say ”
As you cannot put money into them income is balance at the end of 2012 minus balance at the end of 2011.
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Good afternoon and thank you for your reply. I am not clear on what you means when you say “As you cannot put money into them income is balance at the end of 2012 balance at end of 2011″.
Since becoming resident in Spain you are correct I have not been able to invest in ISAs. Therefore I surely within the double tax agreement between Spain and UK there must be some recognition and respect for the terms of the other country’s investment vehicles invested in prior to change of residence – correct? I eagerly await your reply, and thank you in advance.
I am sorry but there is not such agreement.
When you opened ISA bank informed you that exemption only applies while you are UK resident.
Hello Javier
Yours is the best tax website by far and I have gleaned a lot from the Questions and Answers. However the one really simple question I have is whether I actually need to fill out the form 720 if I had not been in Spain 183 days by 31 December 2012. My husband is a teacher and we only arrived at the end of August 2012.
Thanks very much for your help; I look forward to hearing from you.
You lived more than 183 in other country, where you was resident during year 2012, so not resident in Spain.
In Spain tax residence is either for the hole year, or not resident any day. In Spain you cannot be resident part of the year for tax pourposes.
This website / comments section has been a blessing – thank you
I would like you please just to confirm what we have to do with regards to shares and investment funds as I am a little confused.
I have a number of shares in UK companies and 5 investment ISA funds with a total value in excess of 50,000 euro.
How exactly do I present this? Am I expected to list each company, the number of shares and find what their value was as of 31/12/2012 or do we just give a total value for the UK shares and funds as a whole?
Retracing the steps back to 31/12/2012 is some work for each company.
when i press “subir” is that just uploading that section i have inputted ..if i have a number of accounts i repeat that for each bank account?
The invasion of privacy that this form seeks makes Google look like angels !
thank you for your kind assistance
Mike
ISA is just a vehicle, declare what you have into ISA, liquidity, stock or funds
Yes you need to list each company, and the value on the 31st Dec, por each company. Multiply number of shares by market price that date.
Accounts you type also one by one.
Thank you for your reply