22 Feb REPORTING ASSETS OUTSIDE SPAIN. TAX FORM 720: DECLARATION OF ASSETS ABROAD
Few years ago a new tax was introduced that has proved very unpopular and confusing. However, the fact remains it is current legislation and therefore does need to be complied with by all residents owning assets abroad over 50.000 euros. This obligation must be fulfilled during first quarter of each year. The Declaration includes a record for each property situated abroad. For each record indicating its type and subtype.
In the model must be declared: accounts abroad in financial institutions; stocks, bonds, values, financial rights, and savings in insurance companies, deposited, managed or obtained abroad; and all types of Real Estate and rights over Real Estate abroad.
It is excluded from this obligation to declare when the value thereof does not exceed 50,000 € for each type of assets.
Assets not declared, that cannot be proved its ownership arousing from declared income or assets, will be considered income to be taxed, and a 150% punishment over the value of them.
Penalty for not filling, filling incomplete, filing with non-accurate data, will be punished with 100 euros per data with a minimum of 10.000 euros.
On the other hand, the EU Directive urges on administrative cooperation in the field of taxation. Thus, reinforcing cooperation in the exchange of information between countries needed for the liquidation of taxes.
The Government aims to deepen in the coming months in agreements for the exchange of information, both to improve the collection of taxes, and to enhance the fight against tax fraud.
All in all, it is really only a matter of time before the authorities discover undeclared foreign assets. With the new asset reporting rules, the penalties for non-disclosure can be devastating, so it is important to declare all your overseas assets according to the rules, to be fiscally resident in Spain and make an annual tax return known as Declaracion de la Renta.
If you require further legal advice or any tax, legal or administrative matters, please contact Berger&Dozet Lawyers who will be pleased to help you.