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Law in Spain

Law in Spain is a dedicated Blog to advise British Expats living in Spain about their legal issues through the expertise of Abad Abogados lawyers. The main purpose of this blog is helping Expats to find useful and updated legal tips to deal with Spanish Bureaucracy.

Form 720 ‘Declaration of assets abroad’ – will it soon be a thing of the past?
24 November 2015 @ 13:49

According to a report in the newspaper Expansión this week,  Brussels’ disciplinary division have commenced proceedings against Spain for its Form 720 ‘Declaration of assets abroad’ on the grounds that the obligation to declare such assets is contrary to European Community law and considers it "disproportionate".

Brussels have presented an official communication to the Spanish Government who have two months to respond.

This action has caused concerns within the Spanish Tax Office, due to the importance that this declaration has for them both in terms of its initiatives in the fight against fraud and its potential to increase tax revenues. In fact, the tax office supports its entire case for this declaration on the Rodrigo Rato case, the Spanish political figure who earlier this year was arrested for various charges, amongst them being the non- declaration of assets.

The obligation for Spanish Residents to complete and file Form 720 became law in 2013.

If the value of assets held abroad in one of three categories (being real estate, cash balances and shares and securities) amounts to over €50,000, you are obliged to report all of your assets held . This applies if you are the owner, beneficiary, authorised signatory, or have the authority to dispose of the asset. It also includes those held by trusts, companies or fiduciaries.

If you submitted Form 720 in 2013 or 2014, you only need to report on your assets again if the value in one of the asset categories increases by more than €20,000, or if you bought or sold a new asset  or opened or closed a bank,  building society or other account.

Since its introduction in 2013, approximately 126,500 million euros have emerged via Form 720 from 121,000 taxpayers and it has generated significant revenue from fines imposed on  those who have not made declarations or have misdeclared their assets. The Tax Office have announced that 7,013 taxpayers are under investigation for either not filing a return altogether or for filing one in 2014 when they should have done so  in 2013, or who filed at the right time but did so incompletely.

These taxpayers face fines of 5,000 euros for each asset or group of assets where there is missing or inaccurate data, subject to a minimum of 10,000 euros. On top of this, their assets and revenues will be considered as undeclared earnings in their income tax returns, for all relevant periods, with additional penalties arising of 150% based on the amount payable.


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