There is no automatic obligation to file an M720 each year, so if you filed last year for assets owned on 31 December 2012 you may not need to follow this painful process this year. However, if there have been changes in foreign assets you may have to file again.
Spanish tax residents have the obligation to file this special declaration and disclose the ownership of all non Spanish assets if their value, taking each asset category separately exceeds 50.000 € in value. The three categories are as follows:
- Category 1.- Properties and rights over properties owned outside Spain.
- Category 2.- Bank accounts outside Spain (applicable to all current accounts, savings and deposit accounts).
- Category 3.- Shares, bonds, annuities, insurance products and all types of investment assets and investment products.
If you filed the M720 last year, you will only have to file for 2013 if the value of your non-Spanish assets, taking each category separately, has increased by 20.000 € or more in respect of the previous M720 filed.
This looks nice and simple, but remember that, even if assets are identical to last year, the 20,000 € rule may be triggered by currency exchange rate movements. You need to carefully check Euro values at 31 December 2013 and compare to last year.
One of the more unusual aspects of this declaration is that it can be required in the case of an involvement with trusts, foundations or similar structures. Declaration may be required where a person is a settlor, beneficiary or trustee of foreign assets. Simply having powers of attorney to manage foreign assets or a mandate to operate foreign bank accounts may also be declarable.
The deadline to file the M720 this year is 31 March 2014.
The rules for this declaration are often confusing and illogical and even innocent mistakes are punished by severe fines. The fines for failing to make a filing altogether is very severe indeed with a minimum fine of 10.000 € being imposed. If in doubt it is especially important to check the facts with us.