Tax Form 720 Spain: Avoiding Penalties

Though only an 'informative' tax return, failure to declare foreign assets on tax form 720 in Spain can incur a fine of not less than €10.000
Article Published: 16 Dec, 2018, Updated: 22 Nov, 2022 under Foreign Assets Declaration (M720)

Those who are tax resident in Spain (both local Spanish residents and expats resident in Spain) are legally obliged to provide information to the Spanish tax authorities regarding any offshore accounts, offshore investments, and real estate located abroad.

It should be noted that tax form 720 does not imply additional taxation (it is an informative form). The deadline is the 31st of March each year.

What information must be included in this form?

There are three groups or blocks; you must complete this tax form if you are a Spanish resident with assets outside of Spain worth over 50,000 € within any one group:

  1. Offshore accounts in financial institutions, with a total balance (sum of all accounts) higher than €50,000, held as an individual being either owner, holder, representative, authorized recipient, beneficiary or proxy holder, ...
  2. Values, Rights (portfolio investments), life or disability insurances and annuity or temporary revenues, deposited, managed or obtained abroad, with a total balance (sum of all assets of the group) higher than €50,000.
  3. Real estate or Rights on real estate located abroad, with total values (sum of all assets of the group) higher than €50,000.

The number of co-owners is irrelevant. If any of the mentioned elements is higher than € 50,000, they must be included in the form.

Who needs to complete the form this year?

If you completed the Tax Form 720 in Spain last year and your circumstances have not changed then there is NO need to complete this form again.

You should complete this form this year if:

  1. You are a new resident in Spain and this is your first tax year.
  2. You completed the 720 form on a previous year, but your assets have increased by 20,000€ or more of total assets in any of the groups previously referred to, or that have reached more than 50,000€ in a previously undeclared category in the current year.

Tax Form 720 Spain - Penalties for failure to file

Even though it is merely an informative declaration, taxpayers that fail to declare their assets will be subjected to a fine of not less than 10.000 euros for each asset type. An incomplete filing or with inaccurate data, will also be punished with the same minimum fine. Additionally, if the tax authorities discover hidden assets, these assets could be included in the most recent open tax year, and will involve a fine up to 150% of the value of all the undeclared assets. It is highly advised to get support from local experts.

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