In the 2024 tax year, when it comes to making the informative declaration on assets and rights located on foreign soil, it is necessary to file form 720 and to know the deadline we have. Specifically, we have from 1 January to 31 March 2025.
As you can imagine from the information above, Form 720 is the information return on assets and rights located abroad that all taxpayers resident in Spain are obliged to file. An exercise in fiscal transparency that must faithfully reflect this information as a tax record and to avoid fraud.
The Tax Agency specifies in reference to the deadline for filing Form 720 that if ‘for technical reasons it is not possible to file via the Internet within the regulatory deadline for filing, such filing may be made during the four calendar days following the end of said deadline’.
What is Model 720
Form 720 is an information return that must be filed by those residents in Spain who own assets and rights abroad, with the aim of facilitating tax control and the fight against fraud.
This control tool was introduced in Spain in 2012 as part of a set of measures promoted by the government at the time to combat tax evasion and the concealment of assets outside the country. Therefore, the creation of this model responded and still responds today to the need to increase tax transparency and ensure that citizens comply with their tax obligations, even when their assets are located outside national borders.
Model 720 obligations
Before wondering what the mod 720 deadline is, it is necessary to know what the tax obligations are related to the filing of the tax procedure, as certain entities and individuals are obliged to file this informative declaration on assets and rights located abroad.
Who must file the declaration
Individuals residing in Spanish territory who own assets or rights abroad are obliged to file form 720. This group includes those who, although not Spanish nationals, habitually reside in Spain. On the other hand, legal entities, such as companies and associations, that operate or have assets outside the country must also comply with this regulation, regardless of their nationality.
Permanent establishments of non-resident entities are also responsible for filing Form 720. A permanent establishment refers to a physical and lasting presence of a foreign entity in Spain, through which it carries out economic activities. In this context, they must report assets and rights located abroad that exceed the established thresholds, always within the mod 720 deadline.
Exceptions to filing
There are certain cases in which taxpayers are exempt from filing Form 720. These exemptions are relevant for both individuals and legal entities and are designed to simplify the process for those who do not have significant assets abroad.
– Where the value of the assets in each of the groups to be declared (bank accounts, real estate, securities) does not exceed 50,000 euros, filing is not required. This means that, if any of the groups exceeds this threshold, all the assets corresponding to that group must be declared, regardless of the value of the others.
– Exceptionally, taxpayers who have had to make significant changes to their circumstances, such as in the case of assumed capital losses, may also apply for an exemption, provided they meet the specific requirements set out in the tax legislation.
Mod 720 deadline: What we need to know
The deadline for filing Form 720 is the same each year.
Specifically, it is stipulated that the return must be filed between 1 January and 31 March of the year following the tax year being reported. For example, for the financial year 2024, taxpayers must file between 1 January and 31 March 2025.
It should be noted that this filing must only be done telematically through the Tax Agency’s Electronic Headquarters.
Extensions for technical reasons
In extraordinary situations, such as technical problems that prevent filing by the deadline, a temporary extension is allowed. This allows taxpayers to comply with their reporting obligation without the risk of non-compliance.
Next four calendar days
This 4 calendar day extension is a remedy that applies in specific circumstances and does not constitute a general entitlement. Taxpayers should be attentive to the technical situation and act diligently to file their return as soon as possible within this additional period, thus avoiding possible penalties. In case the technical impossibility is not adequately demonstrated, failure to meet the deadlines could result in financial penalties.
Assets and rights to be declared
Especially if this is the first time they are thinking about the deadline for filing Form 720, taxpayers obliged to file this return must know exactly what goods and assets they have to include. They should also be aware of their rights vis-à-vis the Tax Agency.
Bear in mind what goods and assets we are talking about:
1. Accounts in financial institutions
Accounts in financial institutions located outside Spain are the main focus of attention that the Administration monitors in relation to Form 720. We are talking about bank accounts with Spanish holders or beneficiaries, term deposits in foreign entities and/or accounts that generate income or revenue in foreign currency.
A date to remember regarding the mod 720 deadline is 31 December of the corresponding year. This is when the taxpayer must provide precise information on the balance existing on 31 December, or the average balance for the tax year. Either of these options is valid, as long as consistency is maintained with the data reported.
2. Real estate and rights
Real estate includes:
– Residential or commercial property located outside Spanish borders.
– Rights of use or usufruct over property located abroad.
– Land and plots of land of any nature owned by the taxpayer.
All properties exceeding the established limit must be declared. The tax regulation requires the declarant to include all relevant details about the location, type of property and its estimated market value.
3. Securities, insurance and income
Finally, securities, insurance and income obtained or managed abroad are also obligatory to report. This group includes
– Shares and holdings in foreign companies.
– Bonds, debentures and any other type of financial instrument.
– Life insurance contracts issued by insurance companies not based in Spain.
– Life annuities from non-resident institutions.
The taxpayer must include all information relevant to these assets, as any omission may lead to significant penalties.
How to file Form 720
As mentioned above, Form 720 must be filed electronically, which means that taxpayers must access the Tax Agency’s E-Office to do so. A system designed to facilitate the management and control of the returns by those involved.
To file a return, it is necessary to follow certain steps:
– Access the Tax Agency’s website and look for the section for filing form 720.
– Identify yourself by means of a digital certificate, PIN code or the Tax Agency’s identification system.
– Fill in the required fields with the information corresponding to the assets and rights abroad.
– Check all the information before sending it to avoid errors.
– Once the information has been validated, submit the form and keep the proof of submission.
Technical requirements for submission
Make sure you are using an up-to-date web browser, preferably Google Chrome, Mozilla Firefox or Microsoft Edge, which is compatible with the Tax Agency’s platform. And have a valid digital certificate linked to that browser, which enables identification and authentication in the Tax Agency platform.
Mod 720 deadline: Consequences of filing incorrectly or not filing it at all
The consequences of failing to file Form 720 or filing incorrectly can be very damaging for taxpayers, mainly financially.
The penalties for failure to file or incorrect filing of Form 720 are quite severe. The regulations establish a system of fines that is applied according to the seriousness of the offence committed. Some of the main penalties include:
– A fine of 20 euros for each piece of information omitted, with a minimum of 300 euros.
– In cases of total omission of the model or blank filing, the penalty may amount to 150% of the amount not declared.
– If incorrect data is submitted, the fines can vary depending on whether it is a minor or serious infringement, and can be up to 50% of the undeclared amount.
These penalties can be a significant financial burden as, in some cases, they can accumulate if the taxpayer fails to file in the given period or makes repeated errors.
Review and recent changes to penalties
Recently, important changes have been made to the tax legislation affecting penalties related to the 720 model. The review of penalties has moved towards a more equitable policy, which means that, compared to previous years, penalties have been reduced in certain respects.
Conclusions
With a view to an equitable and fair tax system for all citizens, the filing of Form 720 prevents certain taxpayers from benefiting from undue tax advantages by virtue of having assets abroad. It therefore seeks to control foreign assets, prevent tax fraud and generate full tax transparency.
In addition, Form 720 also allows the Spanish tax authorities to comply with information exchange agreements with other countries, which reinforces the exchange of data on taxpayers’ assets and rights.
Everything that has to do with the mod 720 term we have addressed in this content. The summary is that taxpayers who are obliged to file this form have from 1 January to 31 March 2025 to do so.
If you are in a situation where you have to submit the model 720 and you do not know how, contact our agency, and one of our specialists at JDV Asesores for Expats y Self-employed will advise you and carry out the process for you.
