Getting ready for the Spanish 720Taxes Wed, 5 Feb 2014
It sounds a little like a bus route, the 720. The publicity surrounding its introduction last year certainly made it a household name, at least amongst the expat population. However, just in case you haven’t heard of it before, the 720 is the asset declaration form that many residents in Spain had to complete to register the property, accounts and pensions they hold in other countries.
It caused quite a lot of controversy as people debated exactly what the implications of filling it in would be. There was ongoing discussion about who needed to complete one and what qualified them for the pleasure. For some, the rules seemed to change over time. Now, one year on, we’re into the second round of the 720 and if you didn’t complete one last year, or even if you did, you should check whether you fit the criteria this time round.
Who must complete the 720
If you are a resident in Spain and have assets in another country then chances are that you have to complete a 720. There are three types of asset that you might hold that qualify you:
- Group 1: accounts held abroad where the total balance of all the accounts exceeds €50,000. This includes bank, savings and deposit accounts where you are the account holder or have had authorisation over the funds during 2013.
- Group 2: other assets and pensions held abroad exceeding €50,000 in value. This includes bonds, stocks and shares, dividends, life insurance, pension plans and annuities. You are in this category if they have either a total value or a surrender value on the 31st December 2013 of €50,000 or more.
- Group 3: property or business premises abroad. This applies to you if you live in Spain but still own a business or house in another country whose purchase value was more than €50,000.
What happens if you don’t declare
It wouldn’t be the Spanish Tax Authority as we know it if it didn’t threaten us with some pretty hefty fines. The penalty for non-presentation or providing false information is a fine of 5,000€ for every piece of information omitted or wrongly presented with a minimum fine of 10,000€. Figures designed to make you think twice.
Of course, we are also preaching to the converted. Many people did complete the 720 asset declaration form last year, successfully and can take satisfaction in being on the right side of the Tax Authority. For those who didn’t and should have and those whose circumstances have changed and must, it’s time to contact your fiscal representative and make sure you don’t miss the bus.