Since January 1st is open the term to file Spanish Tax Form 720 related to the obligation of Spanish tax residents to file an informative declaration of the assets and rights hold abroad.

We are referring in this blog to the main aspects to be considered in relation to this informative obligation, as well as the novelties introduced in the same for this period

Obligation to submit the Form 72

Initial obligation

There will be an obligation to make this informative Form when it is the first year in which you acquire tax residence in Spain and the value of any of the blocks indicated below exceeds – on December 31st of the year to be declared- the amount of €50,000.

The blocks into which the informative obligation is divided are as follows:

  • Bank accounts located abroad.
  • Securities, rights, insurance policies, and income deposited, managed or obtained abroad.
  • Foreign real estate or rights over real estate.
  • Cryptocurrencies (Form 721, different to Form 720)

The obligation to declare the balances in cryptocurrencies is established for the first time for the tax return corresponding to Fiscal Year 2023, and it will be carried out through Form 721.

Those tax residents in Spain who are holders, co-owners, beneficiaries, authorized or who in any other way have the power of disposal in relation to the assets and rights indicated will be obliged to file the Form, provided that the circumstances mentioned above were met.

This obligation will be extended to those who have the beneficial ownership.

Particularities related to certain USA assets:

According to statements made by the Spanish tax authorities, positions held in all US Retirement Plans (401k, Traditional IRA, Roth IRA, 403(b), etc.), among others, must be declared in Form 720, since they are not considered Pension Plans commercialized by Spanish or European entities.

Likewise, there will also be the obligation to declare the participations held in relation to LLCs or any other business entities located abroad.

Finally, in case of a TRUST, the following tax residents will have the obligation to file Form 720:

a) The settlor

b) The trustee

c) The real or effective beneficiaries.

d) Any other natural person who ultimately exercises control of the Trust through direct or indirect ownership or through other means.

Obligation in subsequent years

Once an initial Form has been filed (Forms 720 or 721), there will be no obligation to make a new Form the following year – in relation to the elements already declared – unless there has been an increase in the value of any of the blocks for an amount greater than €20,000; or the ownership of some of the assets declared were extinguished.

Deadline for filing the Form 720

The term for filing Form 720 (or Form 721 for crypto) runs from January 1st to March 31st of the following year to which the return relates.

Therefore, the last day to submit the tax declaration is March 31.

At Spanish Lawyer NYC we will be pleased to assist you with your tax obligations in relation to your foreign assets and rights.

For more information about Form 720 (or 721 for crypto), as well as to start the procedures for its filing, do not hesitate to contact us through our contact form.

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