Do you know about Model 720?
The Model 720 is an informative declaration where basically assets and rights located abroad are declared by both individuals and legal entities. As it is an informative declaration, being required to submit it does not entail any financial outlay. It only serves to report on the economic content of assets and rights located or developed abroad during the last calendar year.
Who is required to submit this form?
All individuals or legal entities residing in Spanish territory, including the foral territories, who are holders, beneficiaries, or authorized individuals over assets and rights located abroad must submit Form 720. Therefore, any company or individual residing in Spain who has assets or rights located abroad (such as properties, bank accounts, incomes, securities, insurances, etc) must comply with this tax obligation by informing the Tax Agency about such assets through the submission of Form 720.
The deadline for submission is March 31st.
Purpose and Requirements"
As an informative declaration, the main purpose of submitting Model 720 is to inform the Public Administrations about assets and rights located outside Spanish territory. To properly complete it, the following sections must be taken into account:
Accounts in banks located abroad.
Real estate properties and rights over real estate properties located abroad.
Securities, insurances, and incomes deposited abroad.
However, it's important to note that there's an obligation to report on these aspects only when the asset exceeds the combined limit of 50,000.00 euros in any of the indicated categories, regardless of the number of owners.
In the case of multiple owners for the same asset or right, the data will be reported considering the total balances (without prorating) and indicating the percentage of ownership for each owner.
In summary, if the total value of any of the categories of assets and rights abroad exceeds 50,000.00 euros, the taxpayer must report the content of these assets collectively and their individual participation through Form 720.
It's also important to note that if, in the previous year, Form 720 was filed and any of the assets experienced an increase of more than 20,000.00 euros compared to what was declared previously, it must be reported in the current declaration.
If in previous years you were required to submit this declaration, but in the tax year covered by the current declaration you are no longer the owner of any of the assets and rights previously declared, you are still obligated to submit Form 720 to record that this change has occurred.
Are there any exceptions?
Only taxpayers who, in total, don't possess assets and rights worth more than 50,000.00 euros will be exempt from filing Form 720. Nor will those legal entities be exempt whose assets are properly reflected in their accounting records in accordance with the Commercial Code.
Penalties for not filing Form 720
The Form 720 must be submitted electronically through the Tax Agency's website, identifying yourself with your electronic signature. Failure to submit the declaration, submitting it late, providing false or incorrect information, completing it incompletely or even submitting it through means other than electronic or telematic ones can result in significant financial penalties.
Remember that it is important to know all tax obligations, comply with them and their deadlines, as well as to be aware of the risks involved in not complying with any of them.
Do you need to file Form 720?
If you need more information or have any questions, contact the Global Mind Advisors team so we can support and advise you personally.
