Form 720. Declaration of assets abroad

Law 7/2012, of 29 October, introduced a new obligation to report assets and rights located abroad, with the aim of intensifying the fight against tax fraud.

In summary, the holding of assets and rights abroad is subject to a tax obligation of an informative nature that is manifested through Form 720.

Who is obliged to file Form 720?

The following are required to submit Form 720:

• Individuals and legal entities resident in Spanish territory.
• Permanent establishments in Spanish territory of non-resident individuals or entities.
• Entities under Article 35.4 of Law 53/2007: pending inheritances, communities of property, and entities without legal personality that constitute an economic unit or a separate estate subject to taxation.

As exceptions to the general rule, it will not be necessary to submit Form 720, including but not limited to:

• If the combined value of foreign bank accounts (balance as of 31 December and the average balance of the last quarter) does not exceed €50,000.
• Filing the declaration in subsequent years will only be mandatory if there is an increase of more than €20,000 compared to the amounts that triggered the submission of the last declaration.
• This limit also applies to assets such as securities, rights, insurance policies, income, and real estate abroad.

• Those assets owned by legal entities and other entities resident in Spanish territory, as well as permanent establishments in Spain of non-residents, recorded in their accounts in an individualized and sufficiently identified manner.

• This exception applies to assets owned by individuals residing in Spanish territory who carry out an economic activity and maintain their accounting in accordance with the provisions of the Commercial Code, with the assets being individually recorded and sufficiently identified in their accounts. This exception does not apply to securities, rights, insurance policies, and income.

What should be included in the Form 720?

Form 720 must include:

• Bank accounts in foreign financial institutions.
• Securities, rights, insurance policies, and income managed or deposited abroad.
• Real estate and rights over real estate located abroad.
• Information about shares and holdings in the share capital or equity fund of collective investment institutions located abroad.
• Information about life and disability insurance when the insurance company is located abroad, or about temporary or lifetime income obtained as a result of the transfer of capital in money, economic rights, or movable or immovable property to entities located abroad.
• Ownership of virtual currencies.

Deadline to file Form 720

It shall be made between January 1 and March 31 of the year following the year to which the information to be provided refers.

The submission is done exclusively online, using a digital certificate.

Important considerations:
• There will be no obligation to report if the total value of the assets does not exceed €50,000.
• After submitting the first Form 720 declaration, it will only need to be submitted again for asset groups that have experienced an increase of more than €20,000 compared to the last declaration submitted.

We hope that our article has addressed the most basic questions regarding this reporting obligation. We remain at your disposal to provide further advice on this matter, as well as for the preparation and submission of the required documentation.