Tax Form 720 Asset declaration

Information and questions about the Law in Spain and Andalucia.
infoseeker
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Re: Tax Form 720 Asset declaration

Postby infoseeker » Wed Apr 22, 2015 11:36 am

I thought the statute of limitations was abolished in regard to the 720, so it would go back further than
2010
Apparently the EU is doing something about the issue of draconian fines

Parilla
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Re: Tax Form 720 Asset declaration

Postby Parilla » Wed Apr 22, 2015 1:42 pm

Infoseeker, as far as I am aware, the statute hasn't been abolished, but by clever drafting of the 720 the effect is the same. Undeclared assets as far as the 720 is concerned, are deemed in the act to be income attributable to the last barred tax year. If it works, it's a ploy to watch out for in the future.

I don't know what the EU are able or willing to try to do about it, I'm just saying how it stands at present.
I don't know or haven't heard of anyone who has hit this wall, and it's quite possible nobody ever will. Other than the classes of asset banks are being required to report on, I'm not sure the Taxman will be capable of tracing other types of assets.

One thing this does highlight is the importance of keeping all past Tax and other financial records. I was hauled into an investigation by HMRC 30+ years ago and it cost me an arm and a leg to clear myself. Since 1988 I have kept every single financial document on the basis that I can prove anything I need to without lawyer and accountant help - it's a pain in the neck, but it will be a cheap solution if I need it.

Parilla

Lavanda
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Re: Tax Form 720 Asset declaration

Postby Lavanda » Wed Apr 22, 2015 4:09 pm

On the other hand go down the Buddhist route and just don't have any assets. :lol:

BenTen
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Re: Tax Form 720 Asset declaration

Postby BenTen » Wed Apr 22, 2015 4:17 pm

I moved here in May 2014 and sold my house (took a while after I moved here for the sale to go through) in August 2014, at the same time (same day in fact) I bought a buy-to-let in the UK which I now rent out.

My first tax return is due soon and apparently I should also have completed my 720 asset declaration back in March 2015.

Therefore none of my income or assets have been declared in Spain; yet! (they will be; on my soon to be submitted tax return).

I will be declaring all of the above on my first tax return, however it will not have been declared if I submit the 720 form now - should I be worried?

I am going to see a tax specialist tomorrow - hope it's not bad news!
Last edited by BenTen on Tue Aug 25, 2015 10:00 am, edited 1 time in total.

Lavanda
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Re: Tax Form 720 Asset declaration

Postby Lavanda » Wed Apr 22, 2015 5:00 pm

I think you are over-complicating everything.

Just go and talk to the tax people and explain what you have just explained. They are concerned with people trying to deliberately hide assets and evade declarations with the intention of not paying taxes, etc. as in, and I quote "The intention to defraud the tax office either in Spain or the UK". This is not you. Presumably you can prove you have paid taxes properly in the UK? You can further prove you have no intention to defraud the tax office in Spain because you are about to file your tax declaration.

Just talk to them and make like a novice foreigner confused but anxious to do the right and proper thing if only you knew what that was.

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Re: Tax Form 720 Asset declaration

Postby BenTen » Wed Apr 22, 2015 5:16 pm

I would hope that it would be the case, if I went to speak to the tax office.

I have always filed tax returns in the UK (last UK tax return was April 2014) and have no intention of hiding anything.

It all seems odd to me that I have to do the 720 before my first tax return, it would make more sense for them to ask me to do the 720 the year after I arrived so they could compare it to my first tax return (and see if anything was amiss) but that doesn't appear to be how it works.

The only thing worrying me is the fine, if I go and talk to the tax office and they don't appreciate my 'newbie' excuse - then it is a minimum 1,500 euro fine for both me and my partner, so a 3,000 euro fine minimum!

This would be a huge fine for us and not a good start :(

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Re: Tax Form 720 Asset declaration

Postby El Cid » Wed Apr 22, 2015 5:52 pm

It may look odd, but that's just the way it works in Spain. The tax declaration can be submitted during April to June but they require the asset declaration by the end of March so they can get that out of the way before they start the income tax declarations. They just have to plan the available time around the various items in the tax calendar.

Do as Lavanda suggests and talk to the tax office. From my experience they are a very helpful bunch. I don't know how you plan to do your tax declaration, but you can make an appointment at the tax office on 901 22 33 44 after 6th May and they will do it all for you. You just need to make sure you take all the relevant data. That might be a good time to ask them how you submit the Form 720 and have all that data with you as well.

If you haven't already done so, there is a very detailed FAQ on the Form 720 procedure that I wrote a couple of years ago. I haven't updated the links and the year end exchange rate will be different, but it should tell you most of what you need to do.

Above all else, "Don't Panic, Mr Mainwaring!"

Sid

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Re: Tax Form 720 Asset declaration

Postby Lavanda » Wed Apr 22, 2015 8:51 pm

Thank you, Sid. I really do think there is no point in having lots of gestors and tax advisors and putting yourself into the hands of goodness knows who knowing goodness knows what but a lot less than Sid. Talk directly to the tax office. Be nice. Keep calm and take Sid's advice to not panic and please tell us what happens. Good luck.

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Re: Tax Form 720 Asset declaration

Postby alimoreno » Fri Sep 04, 2015 8:22 am

Hello there

I have been reading quite a lot of your comments but I still have queries about form 710 and to be honest, gestors are a nightmare.

I have lived in Spain for three years and I have never had to fill in a form 710 because we had no assets in the UK to declare. However, my husband passed away earlier this year and we had a life insurance in the UK that only pays out on death. I have hence had a payout. I was going to use this money to buy a property in the UK by December as I am moving back next year but the house is a new build and will not be ready until April.

When it comes to declaring this money, do I need to state when and how I received it. I am worried that they may think I havent previously declared it. When it comes to filling the form, I was wondering if I need to say that I have had a insurance payout. It was an insurance with no surrender value, so it didnt need to be declared in the form 710.

As far as I see it, it is only the amount that you have on 31st December that is declared. I cannot get hold of a form 710 online and it is difficult to see what kind of information they request. I have asked my gestora, who files my tax return, but all she says is that is an information requirement and doesnt seem to give much importance to it but I dont want to be fined for making mistakes. I find hacienda quite scarey. As a recently windowed mother of four, I want zero problems with them.

I appreciate your help.

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Re: Tax Form 720 Asset declaration

Postby alimoreno » Fri Sep 04, 2015 8:24 am

sorry 720 form! :|

I have just realised I made a mistake.

MikeNew
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Exchange Rate for the 2015 Modelo 720 declaration

Postby MikeNew » Sat Jan 16, 2016 11:20 am

Anyone know (definitively!) the exchange rate to be used for the 2015 declaration?

El Cid
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Re: Tax Form 720 Asset declaration

Postby El Cid » Sat Jan 16, 2016 11:32 am

For Form 720, the actual rate on 31st December 2015 was 1.36249

For income tax declarations, the average rate for 2015 was 1.37771

Source ECB.

Sid

MikeNew
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Re: Tax Form 720 Asset declaration

Postby MikeNew » Sat Jan 16, 2016 5:32 pm

Thank you Sid

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Re: Tax Form 720 Asset declaration

Postby Miro » Mon Mar 20, 2017 10:48 am

Since the 720 was introduced to great fanfare and much consternation among expats, and since the first year of filing passed, I've noticed there's very little mention of it in the expat media, or even here on A.com and other forums. I was wondering whether new arrivals are even aware of it and their obligation to file if they maintain certain assets "back home"? In my experience, Spanish gestors and lawyers etc. will only answer the questions you ask, and rarely tell you what questions you should be asking, so it wouldn't surprise me if there are droves of recently arrived residents who are completely unaware, and as such are putting themselves at risk of punitive fines etc.
Don't worry about what people think, they don't do it very often

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Icaru
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Re: Tax Form 720 Asset declaration

Postby Icaru » Fri Mar 24, 2017 7:14 pm

We became Spanish residents on December 15, 2016 (but did not actually take possession of our res permit until the end of February, 2017).

Are we supposed to submit modelo 720 for those last 2 weeks of December? We had already paid the non-resident tax before we knew that we would be returning before December 31.

Having read back through many posts on this subject, I see that if all income combined, pension and annuity, is less than 50k annually, then we don't need to even submit modelo 720, correct?

Many thanks!
I am not an Athenian or a Greek, but a citizen of the world. - Socrates

El Cid
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Re: Tax Form 720 Asset declaration

Postby El Cid » Fri Mar 24, 2017 9:47 pm

You will not become tax resident until this year so you wil not need to make a declaration until next year based on your assets on 31st December 2017.

I suggest you read the FAQ on the subject here viewtopic.php?f=42&t=27576

Sid

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Re: Tax Form 720 Asset declaration

Postby Icaru » Sun May 28, 2017 5:32 pm

We are American citizens who obtained Spanish residence on December 15, 2016.

Should we have filed modelo 720 by March 31, 2017 or by March 31, 2018?
I am not an Athenian or a Greek, but a citizen of the world. - Socrates

Paddy Pumpkin
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Re: Tax Form 720 Asset declaration

Postby Paddy Pumpkin » Mon May 29, 2017 5:14 pm

March 31st 2018.... . Although note citizenship is irrelevant, it is your previous tax residency that can be relevant to Spanish tax (but not in this case) The 720 is a year end declaration so you will have to complete the form between January 1st and March 31st 2018. The information you give is your assets as at Dec 31st 2017 (small caveat around bank balances and average balances over the final quarter of 2017)

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Re: Tax Form 720 Asset declaration

Postby bernipops3 » Tue May 30, 2017 8:31 am

We were unaware of having to file a Tax 720 Asset declaration so filed our first one late. Despite our tax advisor having assurances from the tax office we would not be fined they decided that a 3,000 euro fine each would be suitable punishment for this crime! Yes 6,000 euros total just for late submission. This was about 18 months ago. We are going through the process of appealing against this fine in the hope that before we have to pay the EU declares the fines excessive and the cost will be reduced or cancelled.

We are not holding our breath.


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