FORM 720

The 2018 annual declaration is now due for presentation and is  applicable to all residents, both individuals or resident companies of Spain, with overseas assets totalling in value 50000€ or more. This would include property, bank accounts, deposits, shares, stocks, pension funds, life insurance policies, trusts, investment portfolios etc.

Spain is one of the member countries of the OECD (Organisation for Economic Co-operation and Development) and  consequently exchanges tax information with other member countries on an annual basis. The Spanish tax authorities will be informed by other member countries of your interests outside Spain.

In view of this, it is most important that you check to see if you are obligated to present this annual statement; moreover ensure that the correct information is submitted as it can be easily contrasted.  Should this be your first year, it is vital that all information  provided is precise as it could be a potential tax liability in the future.

WHO HAS TO DECLARE?:

This declaration is mandatory to all residents with interest in overseas assets in excess of 50000€. This can be in the form of total or partial ownership, or simply as an authorised person or signatory.

Presentation for the 2018 statement is applicable to:

NEW RESIDENTS  to Spain in 2018, with overseas assets.

CHANGE OF CIRCUMSTANCES for residents who have declared in previous years or residents who has acquired overseas' assets for the first time in 2018 to a value 50000€ or more.

Residents only need to submit a new declaration in successive years if there has been a change in ownership of assets already declared, new assets to be included or if the assets declared in previous declarations has increased in value by more than 20000€ on 31st December 2018 or on average over the last 3 months of the year.  Likewise you are also obligated to inform of any accounts closed, relinquished, or assets sold.

This is applicable to  owner, joint owner, authorised signatory, representative, recipient, settler of a trust, proxy holder or beneficiary of an asset or assets.

FLUCTUATING EXCHANGE RATES Although there may be no change in the assets, the exchange rate can also force you to submit a declaration should the value converted into euros at 31.12.18 result in an increase of 20000€ or more in comparison to what was declared in previous years.

WHAT MUST BE DECLARED?

The statement consists of THREE  separate, independent groups meaning that if only one section is applicable to you, you do not have to submit information on the other two groups if the value of each does not exceed 50000€. eg. Property  valued at 80000€, 50% owner. Bank accounts totalling 25000€: Only need to declare the property (Group 3)

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Information needed:

Group 1: Bank accounts: Balance at 31.12.18 and average balance over last three months of 2018 in banks overseas. This includes Spanish banks established abroad. Bank details required:

Full address,  account number including BIC/Swift code, date of when the account was opened/closed. Type of account: savings, current, deposit etc.

In the event of other currencies, the exchange rate at 31st December will be used to convert to the euro equivalent.

Group 2: Investments: Stock, Shares, and rights in overseas entities, including trusts, collective investment funds (portfolios), investment bonds, overseas private pension funds, life and disability insurance schemes held with overseas insurance companies.

Share value/ liquidating value/ capital/recovery value at 31st December.

Again, in the event of other currencies, the exchange rate at 31st

December or sale/extinction date will be used to convert into the euro

equivalent.

Group 3: Immovable assets. This refers to outright ownership, partially or totally of property, timeshare rights, and rights of use.

Details required: Address, purchase date and price and percentage of ownership. This would also apply to donations or inheritance of  assset(s).

The declaration is also obligatory if the asset(s) was/were sold in 2018. In this case the date of the sale or extinction of ownership would be declared.

WHEN’S THE LAST DAY FOR PRESENTATION?

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1st April 2018.

WHAT ARE THE CONSEQUENCES FOR LATE OR NON PRESENTATION OF THE STATEMENT?

For late presentation there is a minimum fine of 1500€ but can increase depending on the amount of items/data to be included: 100€ per concept not declared eg. bank account number, amounts, address etc.

However,  fines will increase substantially if you have not filed the return and it has been discovered that you had the obligation to do so. Not only is there a minimum fine of 10000€ per group including the additional fines per concept not declared, there will also be a sanction of 150% of the tax calculated on unrealised capital gain as income.

Likewise erroneous, incomplete or false information is also subject to fines.

HOW MUST THE FORM BE SUBMITTED?

The form can only be presented electronically either by the client with the corresponding electronic/digital certificate, temporary  authorisation or an authorised accountant.

The form is purely  informative and does not necessarily imply taxation, however it must be considered in your personal income and/or estate tax returns, if applicable, due in May.

CONTACT US

Undoubtedly  there are personal and specific circumstances which may exonerate you from presentation or on the contrary may obligate you to present one so it is most important that you consult your situation.