Deadline for declaring foreign assets
The Spanish tax law requires residents in Spain, regardless Spanish citizens or foreigners to declare to the Spanish tax authorities as long as their assets outside Spain reach 50,000 euros.
A person is considered a resident if he or she has lived in Spain for more than 183 days per year. If this number of days is not reached, the person is considered a non-resident.
Related article: Criteria for individuals to be considered tax residents
Non-residents are not required to declare their assets abroad.
The purpose of the declaration is the tax office wants to track down your assets outside Spain.
The filing period is from January 1st to March 31st of the following year. For example, if I have lived in Spain for more than 183 days in 2022, I have to declare my assets abroad to Spanish tax at the latest by March 31, 2023.
The declaration process is done through the official form Modelo 720. Mind that you do not need to pay anything when filing 720 form, you only give information to the tax authority, but it you are not paying any tax.
Related article: Declaration of foreign properties as Spanish resident
What kind of assets should be declared?
Deposits, shares, fund investments, real estate are subjetc to declaration.
- If you have a deposit of 50,000 euros or more, you should declare it.
- If the value of your real estate is 50, 000 Euros or more, you need to declare it as well.
- Financial products, stocks, securities, etc. with a value of 50,000 Euros or more must also be declared.
The amount of assets to be declared is based on the 31st of December of the previous year. For example, the amount of assets to be declared by March 31, 2023 is the amount of assets outside the country as of December 31, 2022.
Is there a fine for not declaring?
Previously, the Spanish tax office imposed a fine of 5,000 euros for each under-declaration of foreign assets within the prescribed time. The fine was so high that it was met with fierce protests. The Court of Justice of the European Union has now ruled that such excessive fines are illegal under EU law, so the policy on Form 720 will be changed in the near future. There are already proposals to reduce the fines to a few hundred euros. Copyright WestLaw . com
Attention to the Spanish wealth tax
Although he declaration of foreign assets is only for information purposes and there is no tax payment, however, if the total assets reach a certain amount the tax office woud levy wealth tax.
Related articles: Introduction to Wealth Tax in Spain
