Reporting Assets Outside Spain. Form 720

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.

In the model must be declared,

  1. accounts abroad in financial institutions,
  2. stocks, bonds, values, financial rights, and savings in insurance companies, deposited, managed or obtained abroad
  3. 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.

  1. Current account.
  2. Savings account.
  3. Term deposits.
  4. Credit accounts.
  5. 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.

  1. Values or rights of participation in any type of legal entity. As shares and participations in companies.
  2. Representative values of the transfer of capital to third parties. Bonds …
  3. 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.

  1. Insurance life or disability, whose insurance company is located abroad.
  2. Temporary or life income generated as a result of the deposit of capital, abroad.

· “B”: ownership and real rights over properties located abroad.

  1. Ownership of the property.
  2. Actual use or enjoyment and bare ownership rights over real estate.
  3. Timeshares, timeshares shifts, part-time property or similar formulas on real estate.
  4. 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:

  1. Holder
  2. Representative
  3. Authorized
  4. Beneficiary
  5. Usufructuary
  6. Taker
  7. With power of disposal
  8. 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.
Esta entrada fue publicada en English, IRPF, Sociedades. Guarda el enlace permanente.

462 respuestas a Reporting Assets Outside Spain. Form 720

  1. Roger dijo:

    I have a UK pension fund that provides me with an annual pension paid into my UK Bank. Do I have to declareon form 720 the full amount in my pension fund or just the annual pension I receive. I am Spanish tax resident and pay Spanish tax on my state pension and private pension.

  2. Mieke Buysse dijo:

    Hello !

    Just wanted to make sure this is right !
    I declared my 720 formular last year and for this year nothing changed and the amount didnt increase … So I dont have to make the declaration again …
    Thanks for confirmation .
    M.

  3. Fil dijo:

    Hi Javier,

    Thanks for keeping up this forum.

    I’m not a spanish national and Tax resident for my worldwide income in my own national EU State. I’m divorced since 1996. I travel frequently to Spain (never more then 183 days in a year) to spend as much time with my mental handicapped son as possible, for which I share with my spanish ex wife the “Patria Potestad prorrogada por incapacidad” since his 18th birthday.

    Is the Tax Certificate for worldwide income from my own national State sufficient to prove my Tax residency outside of Spain?

    Regards

    Fil

  4. Paul dijo:

    Hi

    We are Spanish residents, but don’t go over the threshold for the modelo 720, but we have never declared any interest we receive on our UK bank accounts (tax is paid in the UK on these) or premium bonds to the Spanish tax man in our annual Spanish declarations.

    How can we best resolve this or for this year shall we just declare interest received, how do we declare this when tax has been paid in the UK on savings accounts or shall we just declare the premium bond winnings.

    Do we risk them following us up as we have never declared anything abroad before.

    Any advise is greatly appreciated.

    Thanks Paul

    • Tax paid in UK for interest is wrongly paid. As you are tax resident in Spain interest is not taxable in UK.
      You are guilty because you did not inform your bank when you switch your residence status, so bank is withholding because of did not tell then.
      You can claim back this whithholdings to UK.
      And Spain will bill you for this unpaid tax
      Now you are risking because of agreement for exchange tax information

      In Spanish tax return, just add interest in box 022

  5. Dave dijo:

    Hi Javier,

    Thank you for your help.

    I am a tax resident in spain but have a house abroad. At the time of acquisition several years ago the house was greater than 50,000 euro however the house still has a mortgage on it. Since the value of the house that is mine is below 50,000 euro (I still have to pay the bank for the next 20 years) am I still required to complete the Modelo 720?.

    Thanks!

    • Hi Dave,
      In Form-720 you declare gross acquisition value. For this form is not relevant if you have a mortgage of 100% or if you paid real estate cash.
      This means that Form720 can not be used for stating your wealth.

      Yes, you need to fill form 720.
      You may have a penalty of 1.500 euros for filling late, but until now, no one of my clients filling late last year, got it.

  6. Chris dijo:

    Hi
    I had the same problems this year also no problems last year) and in the end I called the tax office and they guided me through this over the phone to change some Internet settings on my PC. One contact said the server is saturated, but this is not the case, so you have to get the right person to help. In the end it worked with Google chrome, not IE. The phone number is on their website.
    I hope this helps.

  7. Mike dijo:

    Javier,
    well I have been trying now for over 10 hours just to push a button and send off this absurd form. Even on two different computers it still just says “processing” and nothing else happens.Yes I do have a certificate and I did manage it last year without this ridiculous problem.

    Is there an address where I can post a printout of the form and include a letter explaining what a nightmare sending it is?

    Many thanks
    Mike

  8. Abi dijo:

    Hi Javier
    I have been in Spain for some of 2013 as the dependent (wife) of a UK Crown Employee (and UK taxpayer) posted abroad. I have had no income of my own for the whole of 2013. Do I need to complete a tax return and/or Module 720 declaration for 2013?
    Thanks
    Abi

    • If you are Spanish tax resident, you need to fill form 720.

      But, with details you give, seems that you are tax resident in UK. Crown employees remain tax residents in UK even if they are the hole year out of UK, as well as dependent spouse.

  9. Chris dijo:

    Hello Javier,
    I’m a tax resident in Spain since October 2012 and I submitted the form 720 in 2013 to declare my UK property at the price I bought it in 2006 using the exchange rate used as at 31 December 2012.
    I sold my house in the UK in June 2013 and with the proceedings (not entirely used) I bought a property in Spain in July 2013.
    1. Do I need to complete the 720 for year 2013 to declare that I do not longer own a property in the UK?
    I did not use the entire proceedings of the sale to buy the Spanish property and was left with a profit partially deposited in Spain and partially in UK (but my asset left in the UK is less than €50,000) .
    2. Do I need to declare this “profit” using form 720 or something different (renta)?
    Many thanks.
    Chris

    • In 2012, You was NOT Spanish tax resident. And as non tax resident, you should have not presented form 720. But as you already did, now declare that it is been sold

      Profit should be declared in Renta. (if you are Spanish tax resident)

  10. Robert dijo:

    Hello, does a person who receives more than 20,000 euros per year as a private uk pension income have to report with the Modelo 720 each year if they do not spend any of this pension income? Thanks.

  11. Thomas dijo:

    Hola Javier

    Thanks for answering questions on this topic.

    I have been living in Spain for a few years and last year I submitted modelo 720. I declared approx 60000 Euros distributed in various bank accounts, 65000 euros in stocks and 30000 in real estate bonds.
    During 2013 I sold stocks for 40000 Euros and furthermore 10000 Euros of real estate bonds were sold. As a result of this one of my bank accounts have increased with the corresponding amounts.
    1. Do I need to declare all my bank accounts although it is only one of them has increased substantially?
    2. Do I need to inform about the sale of stocks and bonds eventhough my combined holdings of stocks and bonds have actually decreased?
    3. Is it possible to completely remake the declaration and declare all my assets per 31/12 2013, also the ones that have not increased? This would almost be easier and would also give a more complete and coherent view of my holdings outside Spain.
    Many thanks
    Thomas

  12. Philip dijo:

    Hi Javier.

    Great site with loads of information. However, I have two questions about the Modelo 720. I have closed two bank accounts this year. I know I have to report the cancellations, but I’m not a 100% clear ehther I have to report the new accounts. I don’t think I do, bvased on tour answers to other poster. The value hasn’t increased by €20k.

    My other post concerns last years return. I reported all my accounts last year (about 17 ). However, on checking for this years return I discovered a savings account that I should have reported, and didn’t. The balance last year was about €800. This year it is zero. It seems to me I can either

    a) Just ignore it and see what happens.
    b) Report it this year.
    c) Report it as a supplementary return for last.

    My worry is I will get fined far more than the deposit, for what is a genuine mistake.
    I reported another account with the same institution, I just forgot about the one I didn’t report.

    What do you think.

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