Warning: The information set out below is a general guideline provided by DOMENECH ABOGADOS.
Specific advice should be sought before any action in reliance on it is taken, as explained more
fully in this website's
legal
notice.
As from year 2013, a rule was introduced, which requires the owners and beneficiaries of assets abroad, whether individuals or companies, to file an annual informative report with the Spanish tax authorities concerning such assets and their value. This obligation is fulfilled by filing a tax return with code number “M-720”.
This new tax return must be presented between 1st January to 31st March in relation to the preceding financial year. However, as an exception, and in relation to the financial year 2012 only, the time period ran from 1st February to 30th April 2013.
The above obligation applies to any individual that is the owner; or acts as a beneficiary, representative, authorised individual or with authority to dispose in respect of the assets abroad, or who could be considered as the “real owner” in accordance with the rules on the prevention of money laundering.
The report relates to different groups of assets:
- Bank accounts:
The reporting obligation arises if the combined balance of the foreign bank accounts is more than €50,000 on 31st December of the year in question or if the average balance for the final quarter of that year exceeds that limit.
- Stocks, rights, insurance, trust funds and other securities or rights,
negotiated or obtained abroad:
This head comprises shares, bonds and any other financial instruments representing a share in foreign entities or a transfer of capital. The requirement also includes life insurance or disability insurance policies that the taxpayer appears to have contracted as at 31st December each year, as well as annuities and similar products. As above, the obligation to report only arises if the combined value of these assets exceeds €50,000. For the valuation of said assets, the rules established for the purposes of Wealth Tax must be considered.
- Real Estate
In this section both property and other rights concerning real estate such as time-shares or combined property are included. One is not obliged to declare these assets if the combined values of such property does not exceed €50,000.
Any variations in value in any of the above groups of assets will require the filing of new informative report if such variations imply an increase exceeding the amount of €20,000. The minimum fine for failing to present the declaration regarding one asset type is €10,000; if all three types fail to be presented, that minimum rises to €30,000. Therefore, careful consideration must be given each year to this report if any modifications in value need be included.
These reports contained in M–720 tax returns must be completed and filed electronically. DOMENECH ABOGADOS can complete these forms and process on your behalf. If you have any queries, please do not hesitate to contact Margarita Domenech on 93 415 0677 or at md@domenechabogados.com