Once again, we remind you that taxpayers subject to Personal Income Tax (IRPF) or Corporate Income Tax who own assets and rights located abroad as of December 31, 2025, may be required to file the declaration of assets and rights located abroad (form 720) by March 31, 2026

This form must be submitted electronically (via the Internet); paper submissions are not permitted. Those who, for technical reasons, are unable to submit Form 720 online within the established deadline may submit it during the four calendar days following the end of that deadline.

For those who previously filed Form 720, filing will only be mandatory if any of the combined balances of the three different asset categories that must be reported (bank accounts, stocks, or real estate) have increased by more than €20,000 compared to the balances that triggered the filing of last year's return. In any case, filing will be mandatory for assets already declared and for which the taxpayer no longer meets the criteria that originally required filing.

Taxpayers must report any assets and rights they hold abroad, including accounts in financial institutions, real estate, securities, rights, insurance policies, and income deposited, managed, or obtained outside of Spain. This reporting obligation does not apply when the value of these assets or rights does not exceed €50,000 per type.

What types of assets and rights are declared?

• Real estate and rights to real estate located abroad. Details will be provided regarding its identification, location (country, town, street, number), acquisition date, and acquisition value (depending on whether it is full ownership, usufruct, bare ownership, or other cases).

• Accounts in financial institutions located abroad. The following information must be included: the name of the bank, its address, account identification, opening or closing dates, balance as of December 31, average balance for the last quarter, and the date on which the status of account holder, representative, authorized person, beneficiary, or person with power of attorney ceased.

• Securities, rights, insurance and income deposited, managed or obtained abroad.

1. In the case of securities, the company name of the entity or the third-party assignee must be stated, as well as the address, balance as of December 31, and number, class of shares and value.
2. In the case of rights, this includes rights representing the transfer of own capital to third parties.
3. With regard to insurance, it is necessary to provide information on the name of the insurance company, its address, and the surrender value of the policy as of December 31.
4. Regarding temporary or lifetime annuities, information must be provided on the company name of the insurance entity, its address and the capitalization value as of December 31.

Regarding the assets and rights that must be declared, there are several nuances that you should take into account, such as those detailed below:

• Bank accounts with joint ownership must be declared when there is a balance as of December 31st exceeding 50,000 euros.
• Joint ownership of real estate must also be declared when the acquisition value exceeds 50,000 euros as of December 31.

Attention. If you filed form 720 last year because you had bank deposits, securities (stocks, investment funds, insurance, etc.) or real estate abroad valued at more than 50,000 euros, you must file this form again in either of these two cases:

• If the value of your assets increases by more than 20,000 euros.

• Or if you have ceased to be the owner or authorized representative of any of the previously declared assets.

 Which parties are obligated?

persons resident in Spanish territory, permanent establishments in said territory of non-resident persons or entities and entities under income attribution (communities of property, civil partnerships, dormant estates…) will be obliged to submit this annual information return, provided that they are holders or authorized persons in accounts abroad whose total balance is greater than 50,000 euros.

Likewise, holders of securities, shares, funds, life insurance policies, real estate, or any other assets located or deposited abroad, with a combined value exceeding €50,000, are also required to declare this information. In addition to legal owners, and unless an exemption applies (which must be carefully analyzed), beneficial owners are also obligated to declare these assets. Beneficial owners are those who own or control more than 25% of the aforementioned assets through entities, whether or not they have legal personality.

There may be many people obligated, particularly resident foreigners, because it is enough to have a small part (even if it is 1%) of one or more accounts abroad with a balance greater than €50,000 (or even have nothing and be a simple authorized user), or have a small part of a property with a value greater than that amount.

Sanctioning regime

Law 5/2022, of March 9, effective March 11, 2022, amended several tax laws (Personal Income Tax Law, Corporate Income Tax Law, and the General Tax Law) to eliminate aspects of the regulations governing the reporting of assets and rights located abroad that had been declared contrary to European Union law by the recent judgment of the Court of Justice of the European Union (CJEU) of January 27, 2022 (Case C-788/19). The aforementioned judgment concluded that the specific penalty regime associated with non-compliance with the obligation to declare assets and rights abroad (Form 720) was contrary to European Union law because it established a disproportionate restriction on the free movement of capital.

Instead of reintroducing a separate and distinct sanctions regime, the legislator has simply eliminated the wording of the provisions considered by the CJEU to be incompatible with the free movement of capital, which, in practice, has only a merely formal scope.

Specifically:

• Fixed monetary fines for failure to report within the deadline or for reporting incompletely, inaccurately or with false information are eliminated.
• The provisions that classified the value of assets not declared within the deadline as an unjustified capital gain or as undeclared income attributable to the oldest tax period among those not yet prescribed are eliminated.
• The proportional monetary penalty of 150% on the tax liability derived from unjustified capital gains or undeclared income is eliminated.

Since the above has not been replaced by a specific regime, any breaches of the reporting obligation are subject to the general sanctioning regime provided for the failure to submit declarations on time or in an incorrect manner that do not cause economic harm to the Public Treasury.

It is important to remember that:

• The eliminated sanctions consisted of imposing a fixed monetary fine of 5,000 euros for each piece of data or set of data, with a minimum of 10,000 euros, or 100 euros for each piece of data or set of data, with a minimum of 1,500 euros, for cases of late submission without prior notice.

• In addition to that penalty, the regulations established another serious consequence for both failing to comply with the reporting obligation and doing so late: the Tax Agency could consider assets held abroad as unjustified capital gains and collect income tax up to the maximum marginal rate, or corporate tax on their value plus an additional penalty of 150% of that amount. This applied even if those assets and rights originated from periods for which the statute of limitations had expired.

AEAT. Frequently Asked Questions

(Updated as of February 2025)

Index:

1. One single model for three different reporting obligations
2. Taxpayers required to file a declaration
3. There is no obligation to report if there has never been an obligation
4. Shared ownership
5. How to calculate the threshold that requires filing a declaration
6. Accounting exemption criteria
7. Other grounds for exoneration
8. Is there an obligation to report on…?
9. Valuation of assets and rights
10. Other issues
11. Frequency of filing the declaration
12. Sanctions and effects
13. Technical questions
14. Frequently Asked Questions for Form 720 (March 2014)

You can contact this professional office for any questions or clarifications you may have.

Warm regards,

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MGI Àmbit

A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.

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