The 720 asset declaration form was first introduced for the income year 2012. It requires residents living in Spain to record their assets over a specific value that are held in other countries. It is for information purposes only and tax is not collected from it directly. The original intention of the form was to address fiscal fraud and it applies equally to Spanish nationals and foreigners who are resident in Spain.
The deadline each year is the 31st March and once you have completed it you do not need to submit it again unless your circumstances change. The criteria for submitting a 720 include having assets in one or more of these three groups:
1. You have 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.
2. You have other assets and pensions that are held abroad and exceed €50,000
This includes bonds, stocks and shares, life insurance, pension plans and annuities that are currently being paid. You are in this category if they have either a total value or a surrender value on the 31st December 2015 of €50,000 or more.
3. You have a property or business premises abroad
The property or business premises must have had a purchase value of more than €50,000.
If your circumstances have changed
Although it is not necessary to complete the form annually, there might be changes in circumstances which mean that you do need to complete it again. These include that during the tax year 2015:
- You have purchased or sold property abroad
- Investments have matured
- You have changed account numbers
- You have cancelled previously declared assets
- You declared last year but this year have reached more than €50,000 in a previously undeclared category
- Your assets have increased by €20,000 in any given group previously declared
You should also remember that the value of your assets will fluctuate according to the exchange rate and you should check this as it can make a big difference to how much your assets are worth.
The 720 asset declaration form caused a lot of concerns when it was first introduced. One of the reasons for this was the huge fines that were threatened if people either completed it inaccurately, too late or not at all.
For non-presentation/ false information there is a fine of €5,000 for every piece of information that is either missed off or incorrect with a minimum fine being €10,000.
For late presentation/ form wrongly presented, such as not being presented electronically, there is a fine of €100 for each piece of information with a minimum fine of €1,500
What should you do
If you came to live in Spain in 2015 or if your circumstances or the value of your assets has changed then you will need to make the declaration any time between 1st January and 31st March 2016. You should contact a fiscal representative in Spain who will put the process in motion.
If you find yourself in the situation of not having declared but now recognise that you need to, then to comply with the law you must complete the 720 this year. There is a risk that you will receive a sizeable fine as a result if you don’t.
What should you do if you haven’t made the declaration but should have and would now like to put matters straight? This applies to quite a large number of people who perhaps thought that the form would go away somehow or simply not be acted on.
However, people’s forms and the declarations they’ve made are being investigated and the Spanish Tax Authority is delving deep into some of the declarations made. This includes investigations into other tax declarations and cross-referencing with other tax documentation including that from other countries.
The fines for being ‘discovered’ rather than submitting late are substantially heftier and you will need to weigh up the risk. Most people feel that complying with the law is much more preferable than worrying about a letter arriving from the Spanish Tax Authority. The huge fines that come with the 720 have been brought to the attention of the EU. However, there is no decision pending and in the meantime most people have concluded that it really isn’t worth the risk.