Declaration of assets abroad in Spain

Form 720: Declaration of Assets Abroad – this form must be completed by all Spanish residents owning assets abroad valued over 50,000 Euros. This obligation must be fulfilled during the first quarter of each year.

On the form you must declare:

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) exceeds 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, authorised…  at 31 December shall declare the balance at 31 December and average balance. … Authorised holders who have ceased to be during the year, indicate only the balance of the day ceased to be holders, authorised…

In terms of the ownership of the account should be indicated if the declaration is:

1. Holder

2. Representative

3. Authorised

4. Beneficiary

5. Usufruct

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.

Co-operation 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 sent 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.