Abogados Alicante

Model 720: Declaration of Assets and Ownership Overseas

Declaration of Wealth Outside Spain: Form 720

Who is obligated to submit 720 form?

If you are a tax resident in Spain, i.e. you have been resident in Spain for more than 183 days during a calendar year, you must inform the Spanish tax authorities of your assets and rights located abroad.

When do I file Form 720?

Form 720 is submitted from 1 January to 31 March of the following financial year to which the information in that model refers to.

Tax residents in Spain must make an informative declaration of their wealth outside the country using Form 720. At Pellicer & Heredia we resolve your doubts regarding this procedure.

When do I need to declare these assets and rights?

Having clarified the details of tax residence in Spain, all those who have at least 50,000 euros in their possession in any of the three blocks of assets for which this informative declaration is intended must file this informative form:

  • Accounts in financial institutions located abroad.
  • Stocks, rights, insurance, and income deposited, managed or obtained abroad.
  • Immovable property and rights on immovable property situated abroad.

There is no obligation to report any asset in those groups in which the sum of the assets does not exceed €50,000. In groups where this is exceeded, they will be obliged to report all the assets that make up the group.

If you submit form 720 for the first time in 2022, you should be aware that in subsequent years you will only have to submit form 720 to report on groups in which there has been an increase of more than 20,000 euros compared to the last declaration submitted.

If a bank account has been cancelled or a property has been sold in subsequent years, the loss of ownership must be reported in the event that the taxpayer has previously filed form 720.

And is it only restricted to those accounts, properties or rights that I am the sole owner of?

Spanish regulations stipulate that, when a resident in Spain is the holder or authorised holder of one or more current accounts located abroad, for which, either individually or in total, the amount of 50,000 euros is reached, it makes no difference whether there are more holders of such accounts or assets: the balance as at 31 December must be reported, without limiting the percentage of ownership of the declarant.

Do I have to submit a Form 720 for each type of asset?

The three reporting obligations, although constituting a different reporting obligation, are declared through the same form, reporting all assets and rights for which there is a reporting obligation.

Important changes to take in mind

In its judgment of 27 January 2022, Case C-788/19, The Court of Justice of the European Union (CJEU) rules on the infringement action brought by the European Commission on 23 October 2019. CJEU has declared that Form 720 is contrary to EU law, that the conditions and penalties set out in the regulation are “disproportionate”, and that Spain has failed to comply with its obligations under the free movement of capital, as they may discourage the acquisition of goods abroad.

Form 720 was imposed in 2013 and will now remain in force with important changes regarding the limitation periods and the amount of penalties. The changes introduced will mean applying to this regulation the penalties and limitation periods provided for in the General Tax Law, so the offence arising from the 720 model will prescribe after four years as is usual for tax offences and the penalties may not exceed 50% of the amount of the defrauded quota, in accordance with the general regime of the rule. Fines are moved to the general regime, but the reporting obligation remains. These fines range from 150 to 250 euros.

The Minister of Finance, María Jesús Montero, explained that the CJEU does not question the model, which will remain in force. The Plenary of Congress endorsed, with no votes against, the new penalty regime for the Declaration of Assets Abroad, Form 720, modified through an amendment in the Senate to eliminate its imprescriptibility and reduce its penalties, following the ruling of the High Court of Justice of the EU (CJEU).

Taxpayers will be able to recover the amount of the penalties for this tax model. The Treasury will have to return the penalties even if they are firm and uncontested, by means of the State’s patrimonial responsibility.

The Tax Agency has already confirmed that there is no obligation for an informative declaration in the Model without the relevant regulatory development on cryptocurrencies. Therefore, there is no need to report on cryptocurrencies in the 2021 Form 720.

For more information, do not hesitate to contact a multidisciplinary professional firm, specialised in international taxation. At Pellicer & Heredia we can analyse your tax situation in a personalised manner and advise you on the best scenario according to your needs.

Model 720: Taxes for residents in Spain. Do you have to pay?

Frequently Asked Questions

There is no obligation to disclose information on pension plans (of contributions to pension schemes) as long as the event giving rise to the payment pension does not occur on a temporary or life annuity basis.

The definition in Spanish law of pension plans is that they are:

Rights of persons in whose favour they are constituted to receive income or capital for retirement, survival, widowhood, orphanhood or invalidity.

Therefore, and in accordance with this definition, such rights do not fall into any of the three categories of property and rights located abroad that are reportable (Accounts/deposits, stocks/insurance and real estate, generally).

To sum up, in order to qualify a foreign financial product as a pension plan, for the purposes of non-inclusion in Model 720, the requirement that the contingency covered must be exclusively retirement, survival, widowhood, widowerhood, orphanhood or invalidity must be met, where contributions cannot be available without either of these circumstances occurring.

Yes, whatever the type of redemption, if as a result of the redemption an income is obtained, this must be reported.

There is an obligation to report on the bank account when this limit is exceeded (and none of the other exceptions to the obligation to declare are present) regardless of the number of account holders. The total balances unprorated shall be reported, indicating the percentage share.

The same applies to any of the types of assets and rights covered by these three reporting obligations where there are several holders.

Whether the property has been acquired by gift or inheritance, the acquisition value shall be taken as the real value of the asset at the time of its acquisition.

It shall report the current account balances at the exchange rate prevailing on 31 December of the financial year to which the information reported relates. The same reference shall be taken in relation to the valuation of the average balance of the last quarter for each account.

Yes, the acquisition value will include costs inherent to the purchase and taxes.

For bank accounts: Account balances as at 31 December and average balances for the last quarter.

For Stocks: Stocks balances as at 31 December.

In respect of shares or participations in Collective Investment Institutions: The net asset values at 31 December.

For insurance: surrender values as at 31 December


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