FORM 720

On 1 March, the deadline for filing the 720 tax form for the 2022 tax year was opened, which ends on 31 March. The content of the new Form was approved by Order HAP/72/2013 of 30 January.

As a reminder, this form is for information purposes only and refers to three types of reporting obligations:

1. Obligation to report accounts in financial institutions located abroad.
2. Obligation to report securities, rights, insurance and income deposited, managed or obtained abroad.
3. Reporting obligation for properties and rights to properties located abroad.

Those obliged to file are taxpayers who, while resident in Spain, are in one of the following situations:

1. When, in their capacity as account holder, representative, authorised person, beneficiary, person or entity with powers of disposal or beneficial owner, they are obliged to report accounts in financial institutions located abroad
2. when they are holders or beneficial owners and provided they are located abroad, of securities or rights representing participation in any type of legal entity, securities representing the transfer to third parties of own capital or securities contributed for management or administration to any legal arrangement, including trusts or asset pools which may be active in the course of trade as well as shares or units in collective investment undertakings.
3. Where they are policyholders at 31 December of each year of life or disability insurance where the insurance undertaking is located abroad or where they are beneficiaries at 31 December of each year of temporary or life annuities as a result of the transfer of capital in cash, rights of economic substance or movable or immovable property to entities located abroad.
4. When they hold or are considered as the real owner of immovable property and rights over immovable property located abroad.

Although the European Court of Justice (CJEU), in its judgment of 27 January 2022, recently ruled that both the obligation to submit this form and the penalties attached to it were contrary to EU law for imposing an excessive burden on the citizen, the Government opted to maintain the obligation to submit this form for 2022 and 2023. It also amended the system of penalties inherent to this Form to bring it into line with European law, by reducing penalties in the event of failure to submit, late submission or inaccurate declaration to mere formal infringements.

Another important aspect that was modified is the non-applicability of the tax statute of limitations in the event of failure to declare by legal persons, also eliminating the presumption of obtaining unjustified capital gains in personal income tax for individuals.