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Residents of Spain who own assets and rights situated abroad may be under the obligation to file form 720. This has been occurring since 2013, in connection with assets and rights owned by personal income taxpayers or corporate income taxpayers on December 31, 2012. This year 2020 is no exception, because the suspension measures adopted to date due to the state of emergency declared on March 14, 2020 (by virtue of Royal Decree 463/2020, of March 14, 2020, subsequently amended by Royal Decree 465/2020, of March 17, 2020) do not include a change in the deadline for filing informative returns with the State Tax Agency.

It is of interest to note that, pursuant to the law in force (and notwithstanding the result of the proceedings currently conducted against Spain, brought by the European Commission), a failure to file form 720, or its incomplete, inaccurate or late filing, will result in the imposition of major penalties.

When preparing the return, it is important to recall the following:

• The assets and rights to be reported are classified in three groups: (a) accounts in financial institutions; (b) securities, rights, insurance and income; and (c) real estate and related rights.
• Those under the obligation to file the return are their owners and beneficial owners; and in the case of accounts, also their representatives, authorized parties or beneficiaries, or those with powers of attorney to manage the accounts.
• Form 720 must be filed for the first time where any of the foregoing groups of assets and rights exceed a value of 50,000 euros.
       
  In successive years, the form must be filed if the total economic data previously reported for each group increases by 20,000 euros (the form need not be filed if the group’s value decreases, even if it does so by more than 20,000 euros). It is important to note that, independent of the variation in value, all changes in the ownership of goods or rights previously reported on form 720 must also be reported.

The complexity of this return and the numerous questions raised in connection with its completion have given rise to a number of clarifications by the Directorate-General of Taxes, those published in 2019 including most notably those referring to assets acquired through an investment club (V0508-19), “free passage” Swiss pension fund savings accounts (V1049-19), the valuation of shares listed on foreign markets (V3511-19) or the consequences of being designated as beneficiary in a “trust” (V3394-19). On its website, the State Tax Agency also posts a list of frequently asked questions and their answers, which should be borne in mind when preparing the return.