Remember that your submission deadline is April 1st.
The informative declaration on assets and rights located abroad, form 720, is one of the main tools in the prevention and fight against tax fraud, so at Ambit Assessor, SL we want to remind you briefly what this form consists of and if you deem it appropriate, help you with the preparation, submission and/or resolution of any doubts about it.
Who is required to file a tax return in 2018?
Natural persons or resident entities that hold legal and real ownership of assets and rights located abroad, and those that have some power of disposal without being the owner, we are talking about agents, representatives, and/or beneficiaries.
What assets and rights must be reported?
The Law divides the assets to be reported into three distinct groups so that each group or block is treated separately with regard to the values to be recorded.
- Accounts and deposits in financial institutions located abroad.
- Securities, representing the participation, managed or obtained abroad: mainly rights, insurance and annuities.
- Real estate located abroad and rights over it. There are special rules for cases of usufruct, bare ownership, and timeshare.
The limits that require or exempt the declaration are also treated independently of each other for each group of assets; these are:
– A limit of €50,000 applies. If this amount is not exceeded for each of the aforementioned groups, there is no obligation to file a return. However, if the limit is exceeded, all assets within the group must be included, regardless of their individual value. In subsequent years, an increase of €20,000 in the value of each group compared to the previous year's return will trigger the obligation to file again.
Secondly, filing a declaration is not mandatory when the assets and rights are identified and itemized in the owner's accounting records. Those responsible or authorized representatives should pay particular attention to this, as they are not exempt.
– Finally, current accounts abroad that must be declared by credit institutions domiciled in Spain are also exempt from being declared.
What are the penalties or consequences of not filing the declaration?
Undoubtedly, one of the most controversial aspects of this model is the hefty financial penalty, which we will now detail. In this regard, it should be noted that the penalty system for this tax return has already been challenged by the European Commission, the economic-administrative courts have begun to overturn penalties under certain circumstances, and, in fact, a flood of appeals is expected.
Current regulations, however, state that, if the tax administration detects undeclared assets, it will consider them as capital gains or income in the case of companies to be attributed to the oldest non-prescribed tax year.
In addition, the following sanctions will apply:
– Capital Gains or Income: 150% of the full amount.
– Data provided in an incomplete, inaccurate or false manner: €5,000 for each piece of information with a minimum of €10,000.
– Late declaration: 100 euros for each piece of information, with a minimum of 1,500 euros.
Remember that the filing of the form 720 declaration must be done electronically via the Internet and can be done either by the declarant himself or by a third party acting on his behalf.
As we mentioned at the beginning of this blog, if you need our help with filing form 720 or have any questions about it, please contact us via email at ambit@ambitassessor.com or at our offices.
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A graduate in Law and with a Master's degree in Tax and Financial Management from the University of Barcelona, he also holds a Postgraduate Diploma in New Technologies Law from ESADE. He specializes in tax and corporate law.
Before joining Àmbit Assessor as manager in 1999, he worked as head of the Tax and Accounting department at the Busquets Terradellas law firm.
For years, he combined his work with teaching, serving as a professor of Public Finance and Tax Law at the Open University of Catalonia.
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