What is Form 720 (Modelo 720)?
Form 720 is an informative declaration on offshore assets and rights located outside Spain.
According to current regulations, Form 720 submission is requested in order to comply with the following objectives:
-Inform the Spanish administration about the offshore real estate and existing rights over them.
-In relation to the previous, communicate about the status of the accounts in financial entities located outside the national territory at the taxpayer disposal.
-Finally, information on insurance, income, securities or rights obtained abroad is a substantial part of the declaration.
What should be included in Form 720?
The obligation to submit Form 720 must be ascribed to the following information, which in turn relates to article 4.2 of Law 10/2010 on prevention of money laundering. In this sense, due to the repeated omission or non-submission of offshore assets, the inspection control on obligation of submission of this form has increased throughout the European Union. It must be taken into consideration, as established by the Spanish Tax Office, that the minimum fine for breach of a single information obligation amounts to € 10,000.
Thus, the statement must contain information on accounts in financial entities located abroad of which the taxpayer are holders or beneficiaries. It is also mandatory in the event that the taxpayer appears as authorized. In addition, real estate and rights over them (outside of Spain) shall also be declared.
The obligation, as indicated by the Spanish Tax Office, is extended to those holders of participations or shares in the capital stock of collective investment institutions, of which they are holders and are located abroad. The taxpayer shall also report whether they are a beneficiary of life or temporary annuities, contracted to entities located abroad, as well as life or disability insurance policy holders.
Who is required to submit Form 720?
As we indicated before, the obligation to file Form 720 -and report on the accounts in financial entities located abroad- lies on those owners, representatives, authorized persons, beneficiaries, whether individuals or companies with rights of disposal or full ownership. To this extent, we must also add the obligation to report on values, rights, annuities and insurances obtained outside the national territory, as well as real estate or rights over real estate located abroad.
At this point we must add a fundamental element: the obligation is limited to an specific amount. There will be no such obligation in the event that the asset or the total of assets does not exceed € 50,000. If we focus, for example, on the accounts in financial institutions, the submission of the form will also be mandatory in the event that the total amount of the balances -or average balances- as of December 31st exceeds that figure.
If the submission of this form is made for the first time, the obligation for the following years is only imposed in the event that the average balance had been subject to an increase of more than € 20,000, taking as reference the last submitted form.
In the case of real estate, shares or annuities, a new submission of Form 720 is requested in the case that the taxpayer sells any of the previously declared assets or buys a new asset. In the case a previously declared bank account is closed, the taxpayer shall also inform.
How is Form 720 submitted?
The Form 720 is to be submitted electronically. In order to file this form, identification with a digital signature (electronic certificate or electronic ID) or with the Cl@ve PIN identification system (only individuals) is requested. In the event that the taxpayer does not have an electronic signature, the person in charge of submission must have the authorization to submit declarations on behalf of third parties. In this case, this authorised person must be registered as a tax office collaborator or as a legal representative. Andalucia-lawyers.com has a team of accountants and tax experts who can help you with this From
When is Form 720 to be submitted?
The deadline for submission of Form 720 is stipulated from 31st March of the year following the one to which the reporting exercise refers.