What is Form 720?
Form 720, an informative declaration that all taxpayers who have assets or rights abroad are obliged to file.
Through the 720, the Spanish tax authorities aim to collect accurate information on the assets and rights that the taxpayer has abroad.
Who must file the Form 720?
The following persons or entities are obliged to file this declaration of assets abroad:
- Individuals and entities resident in the Spanish state, including those resident in foral territories, who have assets located abroad.
- In addition, those who are the beneficial owners of such assets located abroad.
What types of assets must be declared?
- Accounts and deposits opened with banks located abroad.
- A value representing an interest in any entity.
- Properties and rights thereon, located abroad.
What types of assets should not be declared?
- Those assets owned by companies that are exempt from corporate income tax.
- Assets not exceeding the value of 50,000 euros.
- If the limit of 50,000 euros is exceeded, each of the elements making up the total must be reported, indicating the individual value.
- Those assets owned by it, which are recorded in the accounts.
- Current accounts opened in foreign entities with headquarters in Spain.
Who is obliged to file Form 720?
This obligation only applies to residents in Spain for tax purposes, i.e:
- Residents in Spain.
- Residents abroad for diplomatic reasons, members of consular posts, for official employment and active civil servants.
- To whom the Protocol on the Privileges and Immunities of the Staff of International Institutions applies.
Both individuals and legal entities, who are obliged to file both Personal Income Tax and Corporation Tax, respectively, and own assets or rights abroad, will have to file form 720, provided that the balance at 31 December exceeds 50,000 euros, or in the case of bank deposits when the average balance exceeds 50,000 euros.
It will not be necessary to file Form 720 when the value of each asset or right has not increased by 20,000 euros each, with respect to the last filing of Form 720.
In other words, once the 720 form has been filed for the first time, it will not be necessary to file it again, unless there has been a sale of an asset or right located abroad, or if its value increases by 20,000 euros.
What should be included in the 720 declaration?
- Foreign bank accounts.
- Shares and similar.
- Bonds and loans.
- Investment companies and funds.
- Propiedad, usufructo, multi-propiedad, etc.
- Life or disability insurance, when the insurer is located abroad.
What goods are excluded from 720?
The assets that are excluded from 720 are:
- Gold, etc.
What is the deadline for filing the 720?
The deadline for filing the Form 720 runs from 01 January to 31 March of each year.
What are the penalties for not filing the Form 720?
The penalty regime of the 720 is the strictest compared to other information taxes, it must be filed without errors and within the deadline.
- Submission after the deadline without prior request: 100 euros for each piece of information, with a minimum of 1500 euros.
- Failure to report assets and rights located abroad: €5,000 for each item of information to be included in the declaration. With a minimum of 10,000 euros.
- Non telematic submission. It must be submitted telematically using your digital certificate.