Limit ConsultingEvery resident in Spain who holds assets outside the country exceeding €50,000 is required to report them annually using Form 720. This obligation complies with EU regulations but does not involve any tax payment.
Key Points
• Deadline: Information related to the previous year must be reported by the end of March.
• Payment: This is a purely informative declaration, and no tax payment is required.
• Obligation to Report: Reporting is necessary only if the total value of assets in a specific category exceeds €50,000 (see below).
Asset Categories Subject to Reporting
The categories or groups are:
A Spanish resident must report foreign assets if the total value of a specific category exceeds €50,000. These categories are:
1. Bank accounts (Group 1)
2. Pension plans and investments (Group 2)
3. Real estate (Group 3)
Group 1: bank accounts.
You must declare all foreign bank, savings, and deposit accounts if the total consolidated balance exceeds €50,000. This applies whether you are the account holder or have control over the accounts.
Group 2: Pension Plans and Investments
Foreign-held pension plans and investments exceeding €50,000 must be reported. These may include:
• Stocks and shares
• Life insurance policies
• Bonds
•Private pensions*
• Annuities currently being paid
As in Group 1, if the total value of all investments in this group exceeds €50,000, reporting is required.
*State pension and work pensions are classed as income and do not need to be declared.
Group 3: Real Estate
If you own any real estate abroad with a purchase value exceeding €50,000, it must be declared. This includes both residential and commercial properties.
When Do You Need to Submit Form 720?
There is no obligation to submit the form every year unless there are changes in your circumstances. You must file a new Modelo 720 if:
• You are a new resident in Spain and this is your first tax year.
• You had an obligation to report in previous years but did not do so.
• A previously unreported category now exceeds €50,000.
• The total balance in any category has increased by €20,000 or more.
• You purchased or sold a property or other declared assets, changed account numbers, or made other significant modifications.
Penalties for Non-Compliance
Failing to declare or providing incorrect information can result in fines of €5,000 per missing or incorrect data entry. However, these fines have been deemed excessive by the EU Court and are expected to be reviewed.
Additionally, late submission may also result in penalties.
