In the complex international tax landscape, Form 720 is a mandatory informative declaration for tax residents in Spain who own assets abroad and meet certain requirements. This declaration requires detailed disclosure of assets such as bank accounts, investments and properties outside the country.
Who must submit Form 720 in Spain?
On the one hand, the obligation to submit Form 720 applies to various taxpayers, such as individuals and legal entities resident in Spanish territory or permanent establishments of non-resident entities in Spain. The obligation to submit Form 720 applies to various taxpayers, such as individuals and legal entities resident in Spanish territory or permanent establishments of non-resident entities. In addition, the entities specified in article 35.4 of the General Tax Law (LGT), ranging from beneficial owners to representatives and policyholders, are also obliged to submit it.
On the other hand, the requirements that must be met for this submission to be obligatory are that the assets abroad have a value of more than €50,000.
Requirements and Exceptions: Form 720 Compliance
To avoid possible penalties for non-compliance with Model 720, it is essential to understand these criteria and comply with the corresponding deadlines. In this regard, those taxpayers who are subject to the obligation must file their return before March 31st of the following year to which the information to be provided refers, with the exception of Gipuzkoa, where the deadline is extended to June 30th.
However, there are exceptions, such as the non-obligation to declare if the assets have not undergone significant variations in value since the previous year. Specifically, as long as the €20,000 variation threshold is met.
The “Beneficial Owner” for the declaration of assets abroad
One of the key aspects of Form 720 is the determination of the ” actual owner “, defined in Article 4.2 of Law 10/2010. This designation refers to the person who exercises effective control over the declared assets, which may differ from the formally registered owner. It is therefore crucial to understand this distinction for an accurate and complete filing of Form 720, avoiding potential legal problems and sanctions.
Recent regulatory changes and legal compatibility
Recently, regulatory changes have been made affecting Form 720, including the removal of the specific regime of infringements and penalties associated with this declaration. In addition, the legal compatibility of Form 720 with EU law has been questioned, leading to debate about its validity and application.
It is essential to keep abreast of these changes and understand their impact on tax obligations and legal compliance. In the face of this complexity, therefore, professional advice plays a crucial role.
LEIALTA is here to offer you guidance on compliance with Form 720 and other tax obligations. Do not hesitate to contact us for more information and to ensure proper compliance with tax regulations.
