TAX DECLARATION OF ASSETS OUTSIDE OF SPAIN BY TAX RESIDENTS IN SPAIN
All tax residents in Spain, (i.e. Those people living in Spain for more than 183 days a year or those whose main business interest is in Spain), should be aware that as a consequence of legislation approved in 2012 for the prevention and control of fraud, that if they have any assets outside of Spain valued at 50,000€ or more, they are required to submit a 720 Tax Form to the Spanish authorities. This form was created by the Spanish Authorities in order to control assets or funds that people have outside of Spain. This declaration allows the Spanish Tax Office to be aware and to control that appropriate taxes are paid.
This declaration can be made online, through the Tax Office`s webpage sede.agenciatributaria.gob.es where the Modelo 720 (Statement of Assets Outside Spain) can be located and completed. It must be filled in during the first quarter (from 1st January to 31st March) of the first year of residence, to avoid being investigated or fined by the Spanish authorities.
The assets outside of Spain that are subject to this new declaration form fall into 3 categories:
- Real Estate.
- All types of accounts, investments, bank deposits and companies.
- Actions, rent, insurance, bonds or dividends acquired or managed outside Spain.
It is obligatory to submit this form when the total value of assets outside of Spain is 50,000€ or more in EACH OR ANY ONE of the above categories; e.g. if we have 2 properties valued at 30,000€ although the value individually would be below the threshold, the total value of both would be 60,000€, thus exceeding the specified limit in that category, and therefore subject to this new 720 Tax declaration. However, if you have a property valued at 30,000€ and say, shares valued at 30,000€, as they are in separate categories and each total value does not exceed the 50,000€ then you would not be required to make a declaration.
A declaration must be submitted individually by each owner, regardless of how many owners there are, or the percentage of participation held by each owner, (this is specified later). For example, if you own half of a property valued at 50,000€, although your 25,000€ share is below the threshold, both owners are still required to submit an individual declaration based on the total value of the property.
Although this declaration of assets and rights abroad is solely informative and NO TAX is charged, failure to file, late filing or false information could result in serious consequences.
For this reason, we recommend that residents in Spain fulfill their obligation to declare their assets outside of Spain, to avoid the imposition of fines from a minimum of € 10,000 to a maximum of 150% of the value of those undeclared assets located outside of Spain.
Once you have made your first declaration it is not necessary to present any further declarations in subsequent years, unless any of your assets in any category increases or decreases by more than 20,000€ above the initial value declared.
Please do not hesitate to contact us so we can guide you through this process. We will inform you exactly what the requirements for the completion and submission of the 720 Tax Form are.
MARBELLA SOLICITORS GROUP
Jose M. Lopez-Avalos – Solicitor
Tel. 952 901 225 – mail@marbellasolicitors.com
