Filing tax form 720
Dear Sir,
WE became residents in Spain February last year, and we have just heard that we need to file a tax declaration informing the Spanish tax authorities about any assets we have outside Spain.
Can you give us some information?
Form 720
Every resident in Spain, regardless of nationality, and this includes Spanish nationals, is obliged to complete the file form 720. In this form, one has to declare any assets situated outside Spanish territory. If the total value of these assets is under €50,000 on December 31, there is no obligation to complete the file this form.
In essence, there are three categories, namely:
1.- Bank accounts: Current accounts, saving accounts, deposit and credit accounts and any other account or financial deposit. The information that has to be included in the form must contain:
a) The complete name of the bank together with the address.
b) Complete identification of the account.
c) Balance of the account on the 31st of December and the average balance during the last quarter.
d) Date the account was opened.
This obligation does not exist when the balance in the account on December 31. is under €50,000 in total.
2. - Financial instruments and insurances: This includes shares, investment funds, company shares, insurance policies, annuities, etc. This information must include:
a) Full name of insurance company together with the address.
b) Balance on December 31 of the values and rights (value of the share or funds of these companies).
c) Annual income or annuities of which one may be a beneficiary on December 31, as a result of having handed over capital, with the indication of the value at that time.
This obligation does not exist when the values of balances on December 31 are under €50,000 in total.
3. - Immovable assets (properties): This information must include:
a) Identification of the type of property (building land, farmland, house, apartment etc.).
b) Situation of the property with the exact address. c) Date of acquisition. d) Acquisition value. This information about immovable assets will also affect those who were the owners at any time during the year and ceased being the owner by December 31. In this case, one also has to inform of the date and value of the sale.
This obligation does not exist when the value is under €50.000.
This form has to be completed during the month of March, corresponding to the previous year ending on December 31.
In the event that you have been filing this informative declaration (Form 720) since 2012, you need not file one this year if the value of any of the above assets under points a), b) and c) have increased by €20,000, in either of these points, in comparison with the previous declaration.
You may also have to file an income tax form for the income you have received during 2020. This is done during the months of May and June.
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This column is intended for informative purposes only and we strongly advise any readers to seek professional advice prior to taking any action.