Form 720 - Return on assets held abroad.

Form 720 (return on assets and rights held abroad) is simply an informational return on assets and rights located abroad. Since its approval in 2013, Form 720 has generated nothing but controversy, and the latest and most high-profile episode has been the judgment on the penalties that Spain imposes for filing Form 720 erroneously or incorrectly.

As expected, the specific penalty regime has been repealed, and the rule exempting unjustified capital gains from the statute of limitations (time-barring) has likewise been eliminated. Accordingly, failure to comply with Form 720 or to file it on time constitutes a tax infringement subject to the general regime of infringements and penalties.
In short, Form 720 remains in force. If you are required to file it, we advise you to do so within the statutory deadlines, between January 1 and March 31 of each year, in respect of the previous tax year.

Who is required to file Form 720?
The following types of taxpayers are required to file Form 720 if they fall within any of the three cases listed in the next section:
1. Individuals and legal entities resident in Spain.
2. Permanent establishments in Spain of non-resident individuals or legal entities.
3. Entities referred to in Article 35.4 of the General Tax Law (LGT): undistributed estates (herencias yacentes) and co-ownership arrangements (comunidades de bienes).
Cases giving rise to the obligation to report in Form 720
1. Bank accounts: Being the holder, joint holder, representative, authorized signatory, or beneficiary of accounts with financial institutions located abroad whose average balances for the last quarter or balances as of December 31 together exceed €50,000.
2. Securities: Being the holder or beneficial owner of securities, rights, insurance policies, and annuities deposited, managed, or obtained abroad, where together they exceed €50,000. Pension plans are exempt.
3. Real estate: Real estate and rights over real estate located abroad, subject to the aggregate threshold of €50,000.
4. Cryptocurrencies: Being the holder, beneficiary, or authorized party of virtual currencies located abroad. As of today, no threshold has been set below which there would be no obligation to file Form 720.
The Government confirms that there is not yet any obligation to include cryptocurrencies in Form 720. The Spanish Tax Agency (AEAT) stresses that, in the absence of the relevant implementing regulations and, therefore, of the corresponding boxes for cryptocurrency data in Form 720, there is no argument supporting the idea of requiring them to be reported.
Filing Form 720 in subsequent years
You will only need to file it in those years in which any of the three types of assets (bank accounts, securities, or real estate) has increased in value by €20,000 relative to the value reported in the Form 720 filed.
You will also need to file Form 720 again when you sell a property or close an account previously reported.
When is Form 720 filed?
The return on assets held abroad is filed between January 1 and March 31, always providing the information relating to the immediately preceding tax year.
How is Form 720 filed?
This return is filed exclusively online, in accordance with the requirements and procedure set out in Articles 5 and 6 of the Order approving it. To file Form 720, you must have a digital certificate or any other secure form of electronic identification accepted by the AEAT.
Exemptions from filing Form 720
As a general rule, Form 720 need not be filed when the value in each of the blocks of the return does not exceed €50,000. If the €50,000 threshold is exceeded in any of them, whether individually or collectively (for example, in the case of jointly held accounts or properties), the obligation to file remains.
Nor does it need to be filed by a legal entity when these assets are recorded in its accounts, provided they are duly identified and itemized. This exemption releases the holder (the legal entity), but not authorized signatories, attorneys-in-fact, persons responsible…
Therefore, this exemption releases legal entities from the obligation to file Form 720, provided the assets are correctly recorded in their accounts.