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.
Hi javier,
To change my status from resident to no resident,one of the spanish has asked me to
get “certificatado de no residente-modelo 790″ from the police while the other bank
has asked just for certificate of residence from uk.If I get the modelo 790 then I have
to give back my NIE(the green paper),but I know that many people in spain who are
not fiscal resident have the NIE.Is it better to just close the bank account with this
bank?or I should give back my NIE?
thanks alot
For changing your status to non resident,
If you want to do it directly fill form 030.
If you prefer to do it indirectly, get a certificate of tax residency in other country, and stop filling any document as resident in Spain.
If it is just for the bank, you will need to sign the form bank will provide you in case of a non resident account, but for any other financial product you will need to show bank your certificate of tax residence issued by other country.
Hello Javier,
Thanks so much for the good advice listed on this site.
I like many others didn’t find out about the changes in the declaration laws until today!
I hope you can also help me with these enquires:
1. In 2012 I had Premium Bonds and an Endowment policy (an investment designed to pay off the mortgage on a property even though I sold the property long ago) which I believe would both be category ‘V’, the combined value was over 50k€, However the Endowment matured in 2012 and paid out cash into my bank account (aprox 18k£). Therefore the balance of my premium bonds was less that 50k€ and my bank account also less than 50k€ on Dec31st. Does that mean I don’t need to make a declaration?
2. In the future I will receive an inheritance from a relative of between 100k-150k€, I realise I will have to declare this amount in the year that I receive it. Can you tell me what my obligation will be to the Spanish tax man?
Thanks in advance, Matt.
Premium bonds, are category V2, and you will have not more than 30.000 GBP, so you dont reach the limit
Bank account also dont reach the limit for accounts.
That means that you dont need to fill.
About inheritance tax depends on many things: couuntry of your relative, type of assets, your region of residence in Spain…
in my last comment,the point i am making is that ,in 2012 1 was what is termed a Fiscal Nomad and therefore,as i understand it excempt from tax that year in both the UK and Spain. please confirm and suggest what i should do now that i have inadvertantly summitted the form Many thanks.
if you filled form 720, its presumed that you are fiscal resident in Spain. If now you want to say the opposite you will need to prove it.
Read article 108.4 from Ley General Tributaria.
Thanks very much for providing this information.
I was informed only on the 2nd of May (!) – and purely by chance – by friends about this new form 720. I was not aware of its existence previously. I am a Spanish resident with a Dutch passport.
I have a gestor who files my three-monthly IRPF forms, my IVA declarations and my yearly income tax; he has done so since 2008. He did not mention this form 720 at all to me. I would say its my gestor’s general obligation in taking care of my fiscal interest to inform me spontaneously. What’s your opinion on that? Thanks!
Go ahead.
There are 3 extra days for filling form 720 if you had tecnical problems.
Thanks for your quick response! Are those extra 3 days working days, i.e. the last day would then be Monday 6 May?
Think so
Which category on the form 720 do premium bonds come under
V2. Valores representativos de la cesión de capitales a terceros.
Premium bonds are assets issued by a subsidiary of the Treasury for collecting funds.
The model 720 contains a fantastic amount of detail about my assets- this could be invaluable to criminals- if I or anyone else is a victim of fraud – who will reimburse the stolen money/shares etc ???
Please hurry as I have to file it tomorrow ( or not if there is no guarantee of reimbursement.
1/2a
Yes. But its easier to stole that information from you rather tan from hacienda. And even having that information Banks have security.
Hi,
The form 720 is said to be “for information purposes only”
I am sure there will be tax to be paid as well, thats the purpose of course.
I am a Dutch national, resident in Spain. We own 3 commercial building in NL, that we rent out. all have a mortgage and other financing. 1 building has been vacant for 15 months.
The buildings are privately owned by us (not in a company). We pay tax in Netherlands on the proceeds. (a special (reduced) arrangement that is called Box 3, in Dutch Tax Law) So not matter the building is empty or not, the tax is to be paid on the value of the buildings in the property register. (IBI value in Spain)
Will Spanish Tax office also tax us on the proceeds? if yes a what %?
The Box 3 arrangement means that you cannot deduct costs of your investment, it does not matter if the building is rented or not. You always pay tax. The law says that all investments are taxed at a profit of 4% of their “IBI value. The tax rate is 30% of that 4% value. So you have to pay 1.2% of the value of the buildings, no matter cost, or profits.
How will Hacienda handle such an arrangement ! (tax is paid already in Netherlands)
Will Hacienda charge Tax in Spain on this ? They cannot double charge Tax?
I own the shares of company, but the company has little or no activity. A little bit of money on the account. Actually not worth to mention. But I as shareholder have a pension right from the company. The company has a reservation in the account to pay me this pension at a later date. The money is actually not there.
Do i need to mention this on the form 720?
rgds,
eduardo
What TAX? Income tax and Wealth tax already exist in Spain.
Spain as well as your country makes his residents to pay in a worldwide basis. So you need to declare your income in your country in Spain. And taxes paid in NL can be deducted from tax due in Spain.
In Spain, you pay 21% to 27% on your profit from the rentals, you can deduct amortization, interests, maintenance, communal expenses, and local taxes.
According to double taxation agreement between Spain and Netherlands, they can tax you here, what agreement states is that for avoiding double taxation; taxes paid in NL can be deducted from taxes due in Spain.
Taxation of your future income from your company depends on how you designed this pension. With this information I cannot tell you.
I am American w/Spanish residencia. when reporting on bank accts in US, there is no IBAN and the banks I use do not Have a BIC code. If you say there is no IBAn it asks for BIC. Do I leave that blank? Do I put the bank routing number and my cuenta in the cuenta space or do I put the bank routing number in BIC space?
Its right that in US there is not IBAN, but BIC yes. Ask for your BIC SWIFT code,
Hello Javier
If you exceed the limit in one category, say property, but have investments under the limit are you obliged to declare them, that’s to say everything in every category, as you have to make a declaration anyway? I have read a lot about the ’3 categories’ but in the official documents I’ve only seen them refer to 5 (C,V,I,S,B)
And one last question what is the ‘clase de repsentacion de valores’ all about?
Many thanks
3 categorias
1.- c
2.- v i s
3.- b
If total amount in one categoria dont exceeds 50.000 no asset within that categoria is declared
I did not think this form applied to me but have now been told by a friend that it might. I have 2 life insurance policies that I have kept going despite selling my house in the UK, 6 years ago, just in case.
One is death, terminal illness and critical illness and would pay out a decreasing amount in the event of death terminal or critical illness of my wife or I until 2027. If we die this year it would pay 27000 GBP for example.
The other is death, terminal illness and critical illness and would pay out 92597 GBP for death, terminal illness or critical illness if one of those occurred this year.
So total 119597 GBP well above the 50000 threshold.
I would like to know if I have to complete the form as I have to get a move on if so. I would feel robbed if I had a 10000 euro fine for not declaring something when I might never see the money in question.
Charles, if insurance has not surrender value, you dont need to declare.
Insurance covering risk, is not declared
But if it is a vehicle for your savings you need to declare. Even if at the same time covers a risk and is a vehicle for savings.
Hi Javier,
Can you confirm advice I have received from the Gestor who is filing my 720. Gestor says that the 50k threshold is PER COUNTRY, so if you have 50k in one country (UK) and 5k in another (USA) you only need to declare the 50k BUT NOT the other 5k. This sounds strange to me, is this correct? Also, I closed 3 accounts last year and transfered all the money to 2 new accounts which I have declared on the 720. I have read online that Hacienda want to know about the closed accounts also but Gestor said no and even called Hacienda to check who said no.
My Gestor has submitted a draft of 720 but Hacienda has not accepted some information relating to the IBAN and company number of 2 accounts with same bank. The bank is a non-clearing bank (Virgin Money) and only has a generic IBAN. I assume they need MY account info (which isn’t in the IBAN) but not sure how to actually provide this info as the form doesn’t have a box for this? Also the company number – is this the VAT number of a company? Is this the same as their tax ID number?
Sorry for all these questions – I don’t live in an expat area and my Gestor isn’t used to dealing with foreigners’ tax issues. She is doing her best but she has limited knowledge of UK tax/bank system etc. Thank you.
Accounts close before the end of the year are not declared.
Limit is 50.000 regardless you have assets in one or more countries.
Draft cannot be submitted,
Program does not verify if IBAN is right
Virgin money declare it as C5 as non IBAN account
VAT number is not mandatory
I am toiling away trying to complete this nightmare form and am surprised and concerned that when completing the form for V and using the “tab” button to move to the next box, that the box entitled “fecha de incorporación” is highlighted. While no errors come up on validating the full entry of the particular “registro”, I also understood that it is not a requirement to enter this info. Please confirm. Worried. Thank you Javier.
because is not mandatory to fill this cell for assets V and I