Tax Bulletin - February 2013


At the end of October 2012, with a view to supplementing the numerous anti-fraud measures emerging in the course of 2012, a statutory obligation was established to report assets and rights owned and held by residents of Spain and situated abroad.

On January 31, 2013, form 720 was published and will be used to fulfill this reporting obligation. Under one single return, information must be provided on the three types of assets to be reported: (i) accounts, (ii) financial assets (including insurance and term or life annuities), and (iii) real estate and real rights.

The fact that the form must be filed online and cannot be submitted in hard-copy format is important, because readers will recall that the General Taxation Law has established as a punishable infringement not only the failure to file a return, or the filing of a return containing false or incorrect data, but also the use of a method other than that required by the legislative provision to file the return.

Apart from the above, the fact is that the legislation raises numerous doubts over what assets and rights are covered and to whom it applies. In this Bulletin we comment on some of the answers to FAQs posted by the State Tax Agency (the “AEAT”) on its website and on a recent ruling by the Directorate-General of Taxes (the “DGT”) (ruling V0443-13, of February 13, 2013), which establishes that there is no need to report units in foreign collective investment undertakings marketed in Spain. For instance, here are some highlights from the AEAT’s answers:

  • Taking a wholly reasonable stance, the AEAT says that in the case of securities traded during the fiscal year, only securities held at year-end need to be reported; however, note that this is qualified by the requirement that the sale proceeds must have been fully reinvested. This makes it difficult to fulfill the reporting obligation if there have been cash outflows from the relevant trading account.
  • As in the case of units in collective investment undertakings, there will be no obligation either to report shares in other foreign entities deposited at establishments in Spain belonging to custodian institutions, provided that the custodian institutions are under an obligation to provide information on such shares.
  • To calculate the limits excluding the reporting obligation, regard must be had to the overall value of the asset or right, without dividing it by the number of owners or holders.
  • Individuals applying the special “inbound expatriates” regime need not file the return.

The fact that this is a new return means that there will be new clarifications on specific doubts as and when taxpayers raise them with the tax authorities.


1.1 Direct taxation.- Taxation in Spain of nonresident entities for services provided in relation to the production and management of concerts by a band (Supreme Court. Judgment of December 7, 2012)

1.2 Stamp tax.- Liability for stamp tax on second deed recording crystallization of rights already acquired (Castilla y León High Court. Judgment of November 8, 2012)

1.3 Tax management procedure.- Certain criteria on reasons for verifying values (Castilla-La Mancha High Court. Judgment of July 23, 2012)

1.4 Characterization procedure.- It is not possible to revisit and find certain transactions performed in a statute-barred fiscal year to be a fraud upon the law (National Appellate Court. Judgment of January 24, 2012)


2.1 Account revaluation.– Procedure for application (Directorate - General of Taxes. Ruling V0371-13 of February 8, 2013; ICAC. Ruling 5 Spanish Accounting and Audit Institute Gazette 92)

2.2 Corporate income tax.- Rental of real estate can be considered a business activity “without premises or persons”; there may also be no business activity even though there are “premises and a person” (Central Economic-Administrative Tribunal. Two decisions of December 20, 2012)

2.3 Corporate income tax.– Tax credit for environmental investment can be taken if it arose in statute-barred or inspected years (Directorate-General of Taxes. Ruling V2396-12, of December 12, 2012)

2.4 Inheritance and gift tax.- A communication of change of representative with the consequent communication of change of address for the purpose of service of notices tolls limitation period (Central Economic-Administrative Tribunal. Decision of December 13, 2013)

2.5 Value added tax.– Modification of taxable amount in claim for uncollectable debt by making a request for arbitration (Directorate-General of Taxes. Ruling V2512-12 of December 20, 2012)

2.6 Value added tax.- Rule on actual use in Spain for purposes of determining place of supply of services (Central Economic-Administrative Tribunal. Decision of December 18, 2012. Decision no. 3581/2009)

2.7 Obligations to report assets and rights abroad.– Clarification of various aspects (Directorate-General of Taxes. Ruling V0443-13, of February 13, 2013; FAQs on the State Tax Agency website)

2.8 Inspection procedure.- Burden of proof in case of discrepancy between data obtained from third parties and tax return data rests with tax authorities (Central Economic-Administrative Tribunal. Decision of December 18, 2012)


3.1 Special tax on certain lottery and betting prizes: forms 230 and 136

3.2 Forms to be used for returns and information on the excise tax on oil and gas, in particular, and on excise and special taxes, in general

3.3 Informational return on assets and rights situated abroad: form 720


4.1 Events of exceptional public interest: criteria for applying tax reliefs relating to advertising and publicity expenditure


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