It is time again to file the Tax return form 720. This declaration exists since 2012. The declaration consists of providing detailed information regarding certain assets worth more than €50,000 which are located abroad (outside Spain). The assets to be declared are for example bank accounts, shares in companies, securities portfolios, life insurances, annuities or real estate.
The obligation to submit this declaration applies to everyone who was a Spanish taxpayer in the year that the declaration relates to. The declaration must be made between 1 January and 31 March of the year following the tax year in question. This year, therefore, everyone who was a Spanish taxpayer, or ‘fiscal resident’ in 2020 must file a declaration, if the circumstances apply to their situation.
Many details must be provided, including the correct description, date of acquisition, and other data, as well as the value on 31 December and the average value in the last three months of the year.
This declaration does not have to be done every year, but only once. It needs to be repeated if the foreign assets vary more than € 20,000 compared to the previous declaration within the same group of goods.
This means that if, since the last declaration, the share portfolio has not increased by more than 20.000 €, or the savings account has not increased by more than 20.000 €, there is no obligation to submit the declaration this year.
According to the regulation, the minimum fine for not complying with the obligations is €10,000 and can rise to €30,000. If the declaration is made voluntarily but late, the minimum fine is €1,500. This penalty system has been criticised by the European Commission, which believes that these fines are excessive, and many Spanish administrative and other judges follow this opinion, but for the time being the Spanish tax authorities do not care.
Roeland van Passel