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TAX FORM 720, WHO NEED TO FILL IT, AND WHEN? FULL GUIDE 2023

Updated: Sep 9, 2023


Spain Relocation, TAX FORM 720, WHO NEED TO FILL IT, AND WHEN? FULL GUIDE 2023
TAX FORM 720, WHO NEED TO FILL IT, AND WHEN? FULL GUIDE 2023

TAX FORM 720, WHO NEED TO FILL IT, AND WHEN? FULL GUIDE 2023 Form 720 serves as an informative declaration for goods and assets held abroad. While filing this form does not require any immediate payment, it does have implications for your Personal Income Tax Return and Wealth Tax Return. The assets declared in Form 720 must be included in these tax returns.

Who is required to file Form 720? The obligation to file Form 720 falls on individual taxpayers who are Spanish Tax Residents. Spanish Tax Residents are individuals who spend more than 183 days physically present in Spain during the calendar year (from January 1st to December 31st), including work-related trips or vacations abroad. If your spouse and dependent children are Spanish Tax Residents, you may also be considered a Spanish Tax Resident unless proven otherwise.

If you are under the Special Expatriate Tax Regime (commonly known as the Beckham Law), you are exempt from filing Form 720. However, your spouse may still have the obligation to file if they are eligible for the Special Expatriate Tax Regime.

Do I need to file Form 720? The obligation to file Form 720 arises when the total value of assets falls under any of the following categories and exceeds 50,000 Euros:

  1. Accounts and deposits in foreign banking institutions.

  2. Equity holdings in foreign entities, including securities, insurances, or accrued pension plans.

  3. Real estate and associated rights located abroad.

If the value of assets in any of these categories exceeds 50,000 Euros, you must file Form 720 and include only the assets related to the corresponding category.

  • Cryptocurrencies are not required to be reported in this form. Starting in 2024, there will be a separate informative form (Form 721) for Cryptocurrencies and ETFs.

If the value of assets exceeds 50,000 Euros in two or more categories, you must include all assets from those categories in Form 720.

I have previously filed Form 720. Do I need to file it again? Not necessarily. You only need to file Form 720 again if the value of assets in any of the three categories has increased by 20,000 Euros or more since the last time you filed the form.

What is the deadline for submitting this form? The Informative Form on Goods and Assets Abroad must be filed between January and March following the end of the tax year to be considered valid.

What are the consequences of not filing this form? Failing to file Form 720 or providing incorrect information can have serious implications. While some penalties have been disallowed by the European Union Justice Court, the submission of this form remains mandatory. Not filing or submitting it with errors can result in penalties.

A penalty of 20 Euros per data or group of data that should have been included or was inaccurately, incompletely, or incorrectly included in the form is imposed, with a minimum penalty of 300 Euros.

Additionally, if you fail to file Form 720 and Spanish Tax Authorities discover assets held abroad within the last four years, these assets may be considered non-justified capital gains. In such cases, the corresponding Personal Income Tax Return will include the value of all the assets, subject to a progressive tax rate ranging from 19% to 28%. You will be required to pay the corresponding amount, along with late payment interest (3.75% annually).


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