Overseas Assets Form 720
What is Form 720?
Form 720 is a Statement of Assets Outside Spain held by anyone who is a tax resident in Spain and has overseas assets valued at more than € 50,000 per asset or class of assets. This includes property, bank accounts, investments.
What do I need to do?
Report annually for the year to 31st December. The form must be filed with Hacienda (the Spanish tax authority) by the following 31st March. No direct tax liability arises as a result of this form.
If you have already submitted Form 720 in the past few years, you only need to report again if:
- The value of an existing asset grew by more than €20,000, or
- You sold an asset/closed an account, or
- You obtained a new asset.
What happens if you don't file this form? Or file it incorrectly?
As a resident of Spain, you are legally obliged to report all your overseas assets and there are heavy penalties for failing to do so:
- For failing to file Modelo 720 (or filing it incorrectly): €5,000 per infraction (minimum fine of €10,000 for each group of assets).
- For voluntary, late submission: €100 per item (minimum €1,500 for each group of assets).
- Undeclared assets are treated as unrealised capital gains and consequently included in the general base of the income tax return for the earliest year Modelo 720 was established.
- An additional penalty of 150% of the unpaid income tax is also levied.
With the new global automatic exchange of information between tax authorities, Hacienda will discover inaccuracies or omissions easily.
In Spain, where tax evasion exceeds €120,000 (in any tax year) it becomes a criminal offence and as such can result in a prison sentence of up to 4 years!
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