I have receive a couple of queries and calls about this current issue and I thought that some insight was needed. I have, therefore, asked Mr. Juan Antonio Espinosa, tax advisor, to write this article to try to clarify the actual situation.
A new obligation with tax implications has been recently approved in Spain that requires the submission of the new tax 720 form called “Declaración informativa de bienes y derechos situados en el extranjero” ( I will translate it as Informative Statement of Foreign’s Assets and Rights).
Who has to declare: Individuals and legal entities who are Spanish residents and own assets or rights located in foreign countries (in my next article I will address who is considered Spanish resident).
What is to be declared: bank accounts; securities, assets, shares or rights representing the share capital, shares or equity on any kind of legal entity, assignment of rights to third parties; life or disability insurances or lifelong or temporary income resulting from capital allocations; personal and real properties located in foreign countries.
What information is to be provided: Identification of the assets owned as per the approved regulation. Regarding bank accounts, there is no obligation to declare any account when the sum of the amounts by December 31 does not exceed 50.000 euros. In respect to real estate properties, the information should include the type of property, location, address, acquisition date and purchase price.
How is to be declared: via internet by the tax payer or by an authorized third party.
Deadline: in general, the deadline ends on March 31 for the declaration of assets of the previous natural year. However, in 2013 and for the 2012 accounting period, the deadline has been extended to April 30.
Penalty regulations: The Law establishes strong penalties for those not submitting the statements, or not doing it in full or after the deadline. The penalties vary depending on the incompletion. If the submission is done after the deadline, the penalty is 100 euros for each piece of data submitted after the final date with a minimum of 1.500 euros. If there is information missing or no information at all, the penalty is 5.000 euros per each main category of information not submitted or incomplete wit a minimum of 10.000 euros. Those main categories are: bank accounts; shares, bonds or equity; and real estate properties.
* Since each particular case is different, it is fully recommended that you check your own numbers with your lawyer or tax advisor.
A new obligation with tax implications has been recently approved in Spain that requires the submission of the new tax 720 form called “Declaración informativa de bienes y derechos situados en el extranjero” ( I will translate it as Informative Statement of Foreign’s Assets and Rights).
Who has to declare: Individuals and legal entities who are Spanish residents and own assets or rights located in foreign countries (in my next article I will address who is considered Spanish resident).
What is to be declared: bank accounts; securities, assets, shares or rights representing the share capital, shares or equity on any kind of legal entity, assignment of rights to third parties; life or disability insurances or lifelong or temporary income resulting from capital allocations; personal and real properties located in foreign countries.
What information is to be provided: Identification of the assets owned as per the approved regulation. Regarding bank accounts, there is no obligation to declare any account when the sum of the amounts by December 31 does not exceed 50.000 euros. In respect to real estate properties, the information should include the type of property, location, address, acquisition date and purchase price.
How is to be declared: via internet by the tax payer or by an authorized third party.
Deadline: in general, the deadline ends on March 31 for the declaration of assets of the previous natural year. However, in 2013 and for the 2012 accounting period, the deadline has been extended to April 30.
Penalty regulations: The Law establishes strong penalties for those not submitting the statements, or not doing it in full or after the deadline. The penalties vary depending on the incompletion. If the submission is done after the deadline, the penalty is 100 euros for each piece of data submitted after the final date with a minimum of 1.500 euros. If there is information missing or no information at all, the penalty is 5.000 euros per each main category of information not submitted or incomplete wit a minimum of 10.000 euros. Those main categories are: bank accounts; shares, bonds or equity; and real estate properties.
* Since each particular case is different, it is fully recommended that you check your own numbers with your lawyer or tax advisor.
Juan Antonio Espinosa Guerrero
Rafael Espinosa Asesores Asociados
T.: 952 460 358
E.: juanantonio@rafaelespinosaasesores.com
** For more information from the Spanish Tax Office: http://www.agenciatributaria.es/AEAT/Contenidos_Comunes/No_residentes/Tributacion_de_no_residentes/Folletos_divulgativos/irnringles.pdf