If you have a property, bank account or investments abroad, this is of interest to you. It is likely that you have never heard of this model, the 720 model. It is not a typical model like the 303 or the 130 that every businessman and self-employed person knows, as they deal with them every quarter.
This form, called exactly: form 720 “Informative declaration of assets and rights located abroad” affects those taxpayers, individuals and legal entities resident in Spanish territory, permanent establishments in Spanish territory of non-resident individuals or entities and the entities referred to in article 35.4 of Law 58/2003, of 17 December, General Taxation (entities in attribution of income that have ownership or authorisation in accounts abroad with a balance greater than 50,000 euros) (read in the BOE Art.2).
As its name indicates, it is not a form that implies the payment of taxes, but it is a purely informative form, but with important penalties that we will comment on at the end.
What do you have to declare in the form 720?
- Assets – individuals or legal entities with residence in Spanish territory, establishments with presence in this same territory belonging to entities not resident in Spain and entities in attribution of income that have ownership or authorisation in accounts abroad with a balance greater than 50,000 euros.
- Rights – Holders of securities, shares, funds, life insurance, real estate or any other asset exceeding 50,000 euros outside Spanish borders. Also legal and beneficial owners with control of more than 25% of the above assets through natural or legal entities.
- Foreigners resident in Spain (you can read here our blog on resident or non-resident citizen in Spain) – If they own more than 1% of one or several foreign accounts with a balance exceeding 50,000 euros, or a property or part, exceeding 50,000 euros.
The 3 articles:
– Article 42a. Obligation to report accounts in financial institutions located abroad.
– Article 42b. Obligation to report on securities, rights, insurance and income deposited, managed or obtained abroad.
– Article 54a. Obligation to report on immovable property and rights over immovable property located abroad.
Form 720, “Information return on assets and rights located abroad”, shall be filed electronically via the Internet from 1 January to 31 March of the year following the year to which the information to be provided refers.
Form 720 is filed every year?
Good news! No, you may only have to file this form once or in the following cases:
- When the asset or right already declared has been sold.
- When the value of the declared asset or right has increased by €20,000 or more compared to the previous declaration.
Minimum penalty for failure to file form 720
Unfortunately, despite being an informative form, there are many people or companies who are unaware of its existence and therefore do not file the form. This entails a significant penalty.
The minimum penalty for failure to file Form 720 in the first case, in which the three reporting obligations are not met, would be €30,000. In the second case, where only one reporting obligation is breached, the minimum penalty is €10,000.
Do you have any doubts as to whether you are required to file form 720? You can contact us, Firmalex Asesoría Integral and we will solve all your doubts.
- Office phone number: +34 966 421 416
- Whatsapp +34 622 497 615 Skype FIRMALEX.com Email firstname.lastname@example.org
We are in Denia and Valencia.