Declaration of Assets Abroad – What is it and how is it handled?

Learn about Declaration of Assets Abroad as a Spanish tax resident. Understand the requirements, Modelo 720, process, and penalties to ensure compliance with the Spanish Tax Agency.

What Is the Declaration of Assets Abroad?

If you live in Spain and have assets abroad that exceed certain limits, you must inform the Spanish Tax Agency. This is done through the asset declaration Modelo 720. The law states that Spanish tax residents must pay taxes on all their global income and assets, regardless of where they are located.

Here’s what you need to declare:

1. Real Estate:

   – If you own property abroad worth more than €50,000, you need to declare it. Use the acquisition value or the value stated in the title deed if inherited.

2. Bank Accounts:

   – Any foreign bank accounts (savings, current, or time deposits) must be declared if the total exceeds €50,000.

3. Rights, Securities, Insurance, and Income:

   – This includes shares, securities, life or disability insurance, and other financial assets exceeding €50,000 in total.

Using Form 720

To declare assets abroad, you must use Form 720, available on the Tax Agency’s website. Here’s how to handle it:

1. Electronic Submission:

   – You must submit Form 720 online. Ensure you have access through the Cl@ve Pin system, an electronic ID card, or a digital certificate.

2. Filling Out the Form:

   – Access the form and fill in the required information. If you’ve filed before, you can import previous data to save time. Regularly save your progress to avoid losing data.

3. Submitting the Form:

   – Once all information is entered, click the “Sign and Send” button to complete the process.

Who Must Declare?

You must declare your assets if their total value in any of the three categories (real estate, bank accounts, or securities) exceeds €50,000. This is an annual declaration. For example, bank account balances are checked as of December 31st each year.

Penalties for Non-Compliance

Non-compliance with Form 720 can result in significant fines, starting at €5,000. Mistakes or omissions can lead to even higher penalties, including additional fines of 150% of the usual tax liability. Penalties for omitted or falsified information can reach up to €10,000 per item.

Given the severity of these penalties, it’s crucial to accurately report all required information. If you need assistance, the team at Rosenov & Quintero Accountants is here to help – Contact us today

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