Every resident who has assets outside of Spain in excess of 50,000€ are obliged to report them annually using form 720. This is to comply with EU Requirements and it does not involve any tax payment.
The resident in Spain is obliged to report assets located abroad and divided into categories only if the total value of a given category or group exceeds 50,000€.
The categories or groups are:
- Bank accounts (group 1)
- Pension plans and investments (group 2)
- Real Estate (group 3)
Group 1: bank accounts.
The obligation originates when the consolidated balance of all the accounts abroad exceeds €50,000. This includes bank, savings and deposit accounts of which you are a holder, or have control over.
Group 2: pensions plans and investments .
Pensions plans and investments held abroad exceeding €50,000 in value fall in this category. These may include stocks and shares, life insurance, bonds, pensions (private or state) or annuities that are being paid at this moment.
As in the previous group, if the added balance of all elements in the group exceeds 50,000€ you are obliged to declare.
Group 3: Real Estate
If you own any real estate abroad that has a purchase value of over 50,000€ you are obliged to declare. This applies to business premises or houses.
There is no need to submit the form every year if there is no change in the circumstances of the resident.
You should submit a new modelo 720 if:
- You are a new resident in Spain and this is your first tax year.
- You had the obligation to report in previous years but you did not do so.
- Having declared in the previous year, an unreported category has reached more than 50,000€.
- The total balance in any of the categories has increased by 20,000€ or more.
- You have purchased or sold a property or other assets declared in previous years, changed account numbers etc…
Failing to declare or providing wrong information will mean fines of 5,000€ for each piece of missing information. Though these fines have recently been declared excessive by the EU Court and they are expected to be reviewed.
A late presentation can also result in a fine.