Many Spaniards have accounts and real estate outside of Spain, and since the appearance of Form 720 Spain, they have been forced to inform the Treasury. In January, another measure arrived that has worried taxpayers, which is the lifting of banking secrecy in Andorra. Do you have assets abroad and have not yet declared them? If so, what we are going to tell you interests you.

Some time ago, Andorra signed a common information protocol with several countries that aims to fight tax fraud. Based on this protocol, the signatory countries of the agreement exchange information on the accounts that the clients have in each country. This news has meant that taxpayers who have assets abroad are approached, and one of the most useful tools in this regard has been Form 720 Spain.

The goods abroad and the manufacture of the Form 720 Spain

Form 720 Spain is an informative declaration by means of which the Spanish Treasury is informed of the existence of:

  • Accounts in financial entities that are abroad.
  • Securities, rights, insurance and income deposited, managed or obtained abroad.
  • Real estate and rights to real estate located abroad.

Form 720 for the year 2017 must be submitted between January 1 and April 2, 2018.

Form 720 Spain: obliged to declare

It is important not only that you know the existence of the Model 720 and what it consists of, but also if you are obliged or not to declare. These are those required to declare:

  • Natural and legal persons residing in Spanish territory.
  • Permanent establishments in the Spanish territory of non-resident persons or entities.
  • The entities referred to in article 35.4 of the General Tax Law (recumbent inheritances, communities of assets, etc.).

What happens if you do not submit Form 720 Spain or do it out of time?

In relation to Form 720 Spain there are a series of infractions that we must take into account to avoid a penalty from the Treasury. The infractions are the following:

  • Lack of presentation of Form 720.
  • Submit it after the deadline.
  • Present it incomplete or with false or inaccurate information.
  • Submit it by means other than electronic, computer and telematic in those cases in which there is an obligation to do so by that means.

The infractions that we have detailed carry important sanctions such as the following:

  • The non-declaration, or the declaration with errors or omissions can be sanctioned with 5,000 euros per data or group of data, with a minimum of 10,000 euros for each group of goods.
  • Filing the declaration after the deadline carries a penalty of 100 euros for each piece of information, with a minimum of 1,500 euros for each group.

These penalties could be added to others derived from the Personal Income Tax (IRPF) or the Corporation Tax (IS) if it is considered that the assets abroad are unjustified capital gains.

Form 720 Spain in question

In 2013, the Mallorcan law firm DMS Consulting denounced the Spanish regulations on the declaration of assets abroad before the European Commission, understanding that the sanctions are disproportionate as it is an informative declaration and that it represents a limitation to the free movement of people and capitals in the European Union.

Finally, on February 15, 2017, a press release was issued by the European Commission in which it was reported that said commission had asked Spain to modify its rules on assets in other Member States of the EU or the European Economic Area (Model 720). The Commission considers the fines imposed disproportionate.

In the event that you have questions about Form 720, you can contact our experts in the tax and fiscal area, who will help you resolve your doubts and streamline the procedures.

FORM 720 SPAIN