We hereby inform you about Form 720, which sets out the statement of the three reporting obligations contained in articles 42 bis, 42 ter and 54 bis of Royal Decree (RD) 1065/2007, of July 27 on “assets and rights held abroad“.
The declaration corresponding to fiscal year 2023 must be filed between January 1 and April 1, 2024.
The following persons and entities are required to file Form 720 when the total value of assets and rights held abroad, by type of asset or right (accounts, securities or real estate), exceeds the threshold of 50,000 euros:
- Individuals and entities resident in Spanish territory. In accordance with the specific state or regional regulations, including workers posted abroad, as they are considered residents.
- Permanent establishments in Spanish territory of non-resident individuals or entities.
- The entities referred to in Article 35.4 of Law 58/2003, of December 17, 2003.
The following are excluded from this reporting obligation
- The accounts of entities and individual resident in Spanish territory who carry out an economic activity and who keep their official accounting records with sufficient detail of these assets or rights located abroad. However, in the case of individuals who are entrepreneurs or professionals, the reporting obligation still applies in the case of securities, insurance, or income.
- Non-resident individuals who do not have a permanent establishment in Spain and who pay non-resident income tax.
- Individuals who are subject to the special tax regime for workers posted to Spanish territory, as provided for in Article 93 of Law 35/2006 on Personal Income Tax.
- If the total value of the assets and rights of each of the aforementioned groups (accounts, securities or real estate) does not exceed 50,000 euros. In order to calculate the aforementioned limit, the global valuation of the assets must be taken into account regardless of the degree of participation of each obligor.
- When, having complied with this obligation, any of the values of the three different groups of assets and rights mentioned above have not increased by more than 20,000 euros, compared to those declared in the last tax return. In any case, it is compulsory to file the tax return for those assets already declared previously and for which the taxpayer has lost the status giving rise to the obligation to file the return (for example, in the case of closure of bank accounts).
Content of Form 720
Complete identification data and values must be declared on this form:
a) Accounts in financial institutions located abroad. This section includes the virtual currencies held abroad.
The balances of the accounts as of December 31 and the average balance corresponding to the last quarter of the year of all the accounts owned by the taxpayer, or in which they appear as representatives, authorized or beneficiaries, or over which they have powers of disposition or the consideration of beneficial owner, shall be included.
This obligation also extends to those who have been holders, representatives, attorneys, or beneficiaries of the aforementioned accounts, or have had powers of disposition over them, or have been beneficials owners at any time during the year to which the declaration refers, they must indicate the balance of the account on the date on which they ceased to have such status.
There will be no reporting obligation on any account when jointly they do not exceed the threshold of 50,000 euros.
b) Securities, rights, insurances, and income deposited, managed or received abroad.
The balances of the securities/rights as of December 31 will be included, according to the valuation standards applicable to each item, of the following assets:
- The securities or rights representing the participation in any type of legal entity.
- Securities representing the assignment of equity to third parties.
- The securities provided for management or administration to any legal instrument, including trusts or patrimonial masses that, notwithstanding the lack of legal personality, may act in the economic traffic.
- Life or disability insurance.
- Temporary or life annuities.
The reporting obligation is extended to any taxpayer who had been owner or beneficials owners of the shares and holdings at any time of the year to which the declaration refers and who had lost such status on December 31 of that year. In these cases, the information to be provided will be that corresponding to the date on which such extinction took place.
When the combined amount of the securities/rights does not exceed 50,000 euros, there will be no reporting obligation.
It should be noted in this respect that in cases where the financial product contracted by the taxpayer has changed during the year (disinvestment in shares that have led to a new investment in others), the reporting obligation still exists with respect to both the positions cancelled and the new ones made during the year, even when there have been no changes in the amount of the investment.
c) Real estate located abroad or rights thereon.
The acquisition value shall be reported when the ownership of the real estate is held as of December 31.
The reporting obligation also extends to any taxpayer who had been the owner or beneficial owner of the real estate or right, at any time of the year to which the declaration refers and who had lost such status on December 31 of that year. In these cases, the informative declaration must include the transfer value of the real estate or right and the date of the transfer.
In this case there will also be no obligation to report on any real estate or right over real estate when the values do not exceed, jointly, 50,000 euros.
We remain at your disposal for any doubts or queries you may have. In this case, please contact your usual office contact.
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