If you are a tax resident in Spain and own assets or rights abroad, it is essential to be familiar with Form 720. This mandatory informative declaration aims to ensure that the Spanish Tax Agency is aware of assets that taxpayers hold outside the country. The deadline for submission is March 31, 2025. Since its introduction in 2012, this declaration has been subject to controversy due to the severe penalties imposed in cases of errors or omissions. Although the regulations have been modified following rulings from the Court of Justice of the European Union, the reporting obligation remains in force and must be taken seriously to avoid tax issues.

This declaration is purely informative, meaning it does not entail a direct tax payment but rather allows the Tax Agency to maintain a detailed record of the assets and rights held abroad by tax residents in Spain. As a result, all tax residents, whether individuals or legal entities, are required to file Form 720 if the value of their foreign assets exceeds €50,000 in any of the established categories: bank accounts, securities and shares in entities, life insurance policies, and real estate.

It is important to highlight that the information declared in this form is not equivalent to the Wealth Tax declaration. The reported values may include the entire value of an asset, even if the declarant only owns a portion, as the obligation also extends to attorneys-in-fact, beneficiaries, and holders of disposal rights over assets abroad. Additionally, domestic assets in Spain are irrelevant for this obligation, and the minimum reporting thresholds for Form 720 are lower than the taxable thresholds for the Wealth Tax, which may lead to confusion regarding its real impact on the taxpayer’s tax burden.

Not all assets are subject to this declaration. Certain items, such as vehicles, yachts, jewelry, gold, or cash, are not included in Form 720. However, in the case of cryptocurrencies, the Tax Agency has established a specific form, Form 721, which must be used to declare these assets if they are held in foreign platforms and exceed €50,000 at the end of the fiscal year.

A frequently overlooked aspect is that the reporting obligation is not linked to the taxpayer’s age. If a minor owns assets abroad that meet the established criteria, they must file the declaration, provided they have a Tax Identification Number (NIF).

Although penalties have been reduced following the Court of Justice of the European Union’s ruling, failing to submit Form 720 or doing so incorrectly remains risky. In some cases, the Tax Agency may consider undeclared assets as unjustified capital gains and subject them to taxation, which could result in unexpected tax costs for the taxpayer.

Form 720 continues to be a key tool in the Spanish government’s fiscal control strategy. To avoid errors and comply with the regulations properly, it is highly advisable to seek specialized advice. Correctly filing this declaration not only prevents penalties but also allows for better organization of asset information, facilitating future tax filings and avoiding unnecessary complications.