CASE STUDY

Case study: investments and pension plans abroad, am I obliged to submit Form 720?

FORM 720 SPAIN

Representación Gráfica ETL GLOBAL | ETL ILIA

Background
information

  • In this case, the client is a Swiss national with residence in Spain who carries out an international transfer to a company in South America.
  • This transfer is to invest in the development of projects in South America.
  • The transferred amount is deposited in a bank account belonging to the recipient company.
  • The client has no relationship with the recipient company, beyond the investment itself.
  • Added to which the client also has a pension savings account in Switzerland.
  • The Swiss account is of mandatory deposit requirement by the Swiss State that is contracted by law and is unavailable until the person reaches retirement age in Switzerland, which is when he turns 65.

Issues raised
by the client

  1. Am I required to submit Form 720 for having transferred money to a South American company?
  2. Am I obliged to declare the recipient account of the investment in South America?
  3. Am I required to report the savings account in Switzerland when submitting Form 720?

Answers to
the issues raised

  1. In this case, the transfer of funds to a company located abroad which could be conceived, as a transfer of capital to third parties is not represented by values and, therefore, this person is not obliged to submit Form 720 on the basis of the amounts invested.
  2. As regards the recipient account of the investment, as long as the client is not considered a representative, authorised party or beneficiary, or that he has powers over the same, or of which he is the beneficial owner, he will not be obliged to submit the informative statement in relation to the recipient account.
  3. The consolidated rights in a pension plan abroad are not included in any of the categories of assets and rights abroad that must be declared in Form 720. In response to the above, and given that the quantities included in the aforementioned account are consolidated rights of the Swiss social security system, it is understood that the account lies within said social security system and, on this basis, is not considered to be an account opened in banking or credit institutions that should be declared in Form 720, thus he is not obliged to submit this form.
Icono Modelo 720 | ETL ILIA

Ilustraciones de vectorpouch / Freepik

Anything else?

In response to the above, and given that the quantities included in the aforementioned account are consolidated rights of the Swiss social security system, it is understood that the account lies within said social security system and, on this basis, is not considered to be an account opened in banking or credit institutions that should be declared in Form 720, thus he is not obliged to submit this form.

Applicable legislation and related articles

Form 720: legislative changes, judgements, penalties and whom it affects.

Order HAP/72/2013, of 30 January, approving Form 720, information return on assets and rights
abroad, as referred to in Additional Provision 18 of Law 58/2003, of 17 December, on General
Taxation, and determining the place, form, term and procedure for their presentation (Official State
Gazette of 31 January 2013).

Bibliography
  • Form 720
  • Model 720 after the deadline

  • Form 720 penalties