Form 720

Information return on assets and rights located abroad: Form 720

Form 720. Declaration of assets abroad

Law 7/2012, of October 29, amending tax and budgetary regulations and adapting financial regulations for the intensification of actions in the prevention and fight against fraud, introduced a new reporting requirement for assets and rights located abroadThe General Tax Law, incorporating for this purpose the eighteenth additional provision in the General Tax Law.

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?

This declaration must be filed by all those who individuals and legal entities, residents in Spanish territory, permanent establishments in Spanish territory of non-resident persons or entities and the entities referred to in Article 35.4 of the General Tax Law, who are owners, have power of disposal or are authorized of any of the aforementioned assets.

  • 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: Inheritances, community property and entities without legal personality that constitute an economic unit or a separate estate subject to taxation.

Exceptions to the general rule include, among others:

  • In relation to the obligation to report accounts in financial entities, there will be no obligation to report on any account when the balances as of December 31 and the average balances of the last quarter of these accounts do not exceed, jointly, 000 Euros. In addition, the filing of the tax return in subsequent years will only be obligatory when there is an increase of more than 20,000 Euros with respect to the amounts that determined the filing of the last tax return. It is important to note that the 50,000 Euros are per total account, not per account holder.
  • The same limit, as well as the obligation to file the return in successive years, mentioned in the previous paragraph, applies to all assets in this category: securities, rights, insurance and income deposited, managed or obtained abroad.
  • The same limit, as well as the obligation to file the return in successive years, applies to all assets in the following category: real estate and rights over real estate.
  • 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.
  • Those assets owned by individuals resident in Spanish territory who carry out an economic activity and keep their accounts in accordance with the provisions of the Commercial Code, recorded in their accounts in an individualized and sufficiently identified manner. This exception does not apply to securities, rights, insurance and income.

What should be included in the Form 720?

Form 720 must basically contain the following information:
Assets whose ownership must be reported

  • Obligation to inform about accounts in financial entities located abroad, (art. 42 bis of the Regulation approved by RD 1065/2007).
  • Obligation to provide information on securities, rights, insurance and income deposited, managed or obtained abroad, (art 42.1 of the Regulation approved by RD 1065/2007).
  • Obligation of information on real estate and rights over real estate located abroad, (art 54 bis of the Regulation approved by RD 1065/2007).
  • Information on shares and participations in the capital stock or equity fund of collective investment institutions located abroad (art. 42 ter section 2 of the Regulation approved by RD 1065/2007).
  • Information, on life and disability insurance when the insurance company is located abroad or on temporary or life annuities obtained as a result of the delivery of a capital sum in money, economic rights or movable or immovable property, to entities located abroad (art. 42 ter paragraph 3 of the Regulation approved by RD 1065/2007).
  • As of fiscal year 2022, reporting obligation for 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. Therefore, the information for the year 2015 must be submitted by March 31, 2016 at the latest.

The filing must be made by telematic means (through a digital certificate).

There will be no obligation to report when the sum of the assets does not exceed €50,000.
– Once the first Form 720 return has been filed, it must only be filed again for those groups of assets that have experienced an increase of more than €20,000 with respect to the last return filed.

What are the penalties for non-compliance with the reporting obligation?

The sanctioning regime detailed below is modified/derogated by the approval of Law 5/2022 of March 9, 2022, to see the details of the current sanctioning regime, please visit the following article on “Approved modifications of the sanctioning regime of the Model 720”.

Commission on very serious tax violationIn the case of failure to comply with the obligation to declareThe penalty system provides for a fine of 5,000 Euros for each data or set of data, for each account or item of property, plant and equipment omitted or incomplete, inaccurate or false, with a minimum of 10,000 Euros. This penalty is reduced to 100 euros for each piece of data or set of data, with a minimum of 1,500 euros, in the case of filing out of time without prior request, or in the event that it has been filed by means other than electronic, computer and telematic means, when there is an obligation to do so by such means.

In addition, non-compliance with the reporting obligation has consequences for personal income tax (IRPF) and corporate income tax (IS), which, broadly speaking, could result in a higher amount to be paid in personal income tax (IRPF) or IS as a result of consider undeclared assets as capital gains or undeclared income, with the corresponding sanction consisting of a proportional fine of 150% of the of the amount of the gross tax liability resulting from the imputation to personal income tax or corporate income tax.

Undiscovered and undeclared income will be imputed to the last tax period among those not prescribed, and as a novelty of special relevance, it should be noted that this income will be imputed to the last tax period of those not prescribed. undeclared income “shall not be subject to the statute of limitations”, i.e., they will always be attributable to the last non-prescribed period (regardless of whether it can be proven that they originated in a period already prescribed).

In the case of assets acquired through declared income or income generated when the taxpayer was not considered an IRPF taxpayer, neither the treatment of undeclared gain nor the corresponding penalty will be applied.

The Model 720 was adopted on October 29, 2012 as part of the measures against tax evasion and avoidance.

The law distinguishes three groups of assets that require information:

  • Foreign accounts.
  • Securities, rights, participations, insurance, annuities and deposits managed or invested abroad.
  • Real or immovable rights abroad.

1. High penalties for lack of information

The penalties for incorrect, incomplete or missing information are €5,000 for each missing information with a minimum of €10,000.

For late declarations, the penalty is reduced to €100 for each piece of information with a minimum of €1,500. The penalty also applies regardless of whether the estate has been declared in income tax or wealth tax.

This means that if a taxpayer has a vacation home in France and does not complete the 720 form, he must pay a penalty of at least €10,000, even if the amount increases as the date of purchase, the purchase price or the address of the property has not been declared.

And it can be even worse…

The Tax Agency assumes that the property or estate was acquired with undeclared funds and credits this amount as unjustified income in the income tax return, so this amount is taxed at a rate of 52% until 2014 and 47% currently.

A penalty of 150% plus late payment interest will be added to this calculated tax.

In our example, this means that a taxpayer who purchases an apartment in 2001 and has a value of 300,000 euros can easily expect a penalty that exceeds the value of the property.

2. No statute of limitations

Although the rest of the taxes that must be declared to the State in Spain are subject to the statute of limitations after 4 years (after the last due date, i.e. 4.5 years in practice), the provisions of the Model720 stipulate that this statute of limitations does not explicitly apply to the criminal provisions mentioned above. This means that the Tax Agency can enforce the aforementioned penalties at any time, even if the house was purchased in France during a tax period that has already expired.

To avoid acceptance of the acquisition of unjustified funds, the taxpayer must prove that he has taxed the means of purchase, which is not always easy. The burden of proof is on the taxpayer. However, the penalty can also be avoided if the taxpayer proves that it was not subject to income tax.

Are threats of punishment illegal?

The European Commission assumes that the aforementioned threats of punishment violate European law and has opened a sanction procedure.

It has been announced in Brussels that a sanctioning procedure will be initiated against these “disproportionate” sanctions and that Spain will be warned that the obligation to provide information on goods within the EU (EEA) may violate EU law.

The lack of prescription of goods within the EU or EEA is disproportionate. The Spanish administration already has this information within the framework of data exchange within Europe, with the exception of Switzerland and Andorra.

But the Government has stated that it does not intend to change the declaration of assets abroad and continues to apply the 720 models. The truth is that, to date, and despite the devastating opinion of the European Commission, no regulatory changes have been introduced to make Model 720 compatible with EU legislation.

The opinion of the European Commission does not affect the validity and effectiveness of the rules established by the Member States, nor the acts that have been produced in application thereof.

Although this reporting obligation will be declared null and void sooner or later by the Brussels institutions, it is nevertheless advisable to provide it at this time. You may contact our office for any questions or clarification in this regard.


You already know, if you have assets or rights abroad and meet the requirements described above, you will have to file form 720 if you do not want to incur in a very serious tax infringement.

We hope that with our article we have resolved the most basic questions regarding this informative obligation, and we remain at your disposal to advise you in this regard, as well as for the preparation and presentation of the same.

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