WHAT IS THE FORM 720?
This
annual informative statement informs the Spanish tax authorities of residents’
overseas assets to a value of 50000€ or more.
The 2021 annual
declaration is now due for presentation and is applicable to all residents, both
individuals or resident companies of Spain. This would include property, bank accounts,
deposits, shares, stocks, cryptocurrency investments, 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 can 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 due 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 worth 50000€ or more. This can be in the form
of total or partial ownership, beneficiary, or simply as an authorised person
or signatory.
Presentation
for the 2021 statement is applicable to:
NEW RESIDENTS who became residents in Spain in 2021.
CHANGE OF CIRCUMSTANCES for residents who have declared in
previous years or residents who has acquired overseas' assets for the first
time in 2021 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 have increased in value by more
than 20000€ on 31st December 2021 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 number
of assets, the exchange rate can also force you to submit a declaration should
the value converted into euros at 31.12.21 result in an increase of 20000€ or
more in comparison to what was declared in the last statement.
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€. E.g. Property valued
at 80000€, 50% owner. Bank accounts totalling 25000€: Only need to declare the
property (Group 3)
Information
needed:
Group
1: Bank accounts: Balance
at 31.12.21 and average balance that covers October, November, and December of
2021 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, securities, rights in overseas entities, including trusts, collective
investment funds (portfolios), investment bonds, overseas private pension funds,
cryptocurrency trading, life and disability insurance schemes held with
overseas insurance companies.
Share
value/ liquidating value of unit/ capital/recovery value on 31st December.
Again, in
the event of other currencies, the exchange rate on 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 2021. In this
case the date of the sale or extinction of ownership would be declared.
WHEN’S THE LAST DAY FOR PRESENTATION?
l
31st MARCH 2022.
WHAT ARE THE CONSEQUENCES FOR LATE OR NON-PRESENTATION
OF THE STATEMENT?
The start of 2022 saw the
European Court of Justice declare the fines imposed by the Spanish tax office for
non or late presentation of the form 720, disproportionate and contrary to EU
law. This will be huge sigh of relief
for the many expats that had missed the deadline in past years or had not
supplied all relevant information.
Up until now fines were
excessive establishing a minimum fine of 1500€. Moreover, these fines increased substantially
when failing to file the return and the tax office having informed you of your
obligation to do so: Sanctions of 150% of the tax calculated on unrealised capital
gain as income could have been the consequence.
In light
of the recent EU judgement the Spanish government will have to adapt the fines
to EU requirements. It is expected that these will be announced before the
presentation deadline for 2021’s statement.
Erroneous,
incomplete, or false information are 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 submit, so it is most important that you
consult your situation.
Any
queries that you may have concerning this matter or you wish to process your
statement, please contact us:
ASFEMP SL
Edf
Levante 3rd floor door A-B
Av Martinez Alejos Nº4
03501 Benidorm
Telef: 96.6802669
Fax:
96.6804637
Email: asfemp@reaf.economistas.org
liz.asfemp@gmail.com
sarahasfemp@gmail.com
raquel.asfemp@gmail.com
mariloasfemp@gmail.com