The fiscal obligation to submit a Disclosure Statement to the Spanish Tax Office regarding assets located outside Spain (Form 720) is still in place. It entails providing information regarding three different types or groups of assets located, managed or obtained outside Spain:
– Bank accounts (a)
– Securities, rights, insurance and annuities (b)
– Real estate and rights on real estate (c)
Regarding bank accounts (a), the declarations refer to its balance on Dec 31 as well as average balance during the last quarter of the year; regarding securities, rights, insurance and annuities (b), its market, liquidation, surrender or capitalization value on Dec 31; while real estate (c) is declared according to its purchase price.
In all cases, valuations are to be declared in euros, at its official exchange rate on Dec 31 if in other currencies.
Both individuals and legal entities, including joint ownerships and other entities without legal personality, who are tax resident in Spanish territory and own such assets have the obligation to submit Form 720 -online-. The obligation lies on the person or entity with the right to dispose of the specific asset.
Despite the 27/01/2022 Sentence by the Court of Justice of the European Union which has ruled that certain aspects of the tax form are against E.U. law (particularly the amount of the fines it establishes and the impossibility in practice to allege statutory limitation), the obligation to submit it is still in place and its deadline for submission is March 31.
(A) If you have never submitted Form 720: You will not have the obligation to submit the tax form in case none of those groups include assets that are globally above €50,000, counting possible joint ownerships as full ownerships. In case they do, the obligation is to inform all assets included in the group. As for bank accounts, the obligation exists if either the sum of balances on December 31 or the sum of average balances for the 4th quarter is above that figure.
(B) If you have handed Form 720 in previous years: You must only inform about the groups in which an increase of over €20,000 has taken place in relation to the last Statement, as well as the assets in which ownership has been lost for any reason (e.g., sale or closing). If not, there is no obligation to submit the declaration. Bear in mind that changes in the exchange rate of currencies can affect the obligation to declare.
It is understood that within the following weeks a new penalty system will be approved to accommodate the one set up by the law to the recent Court sentence.