We remind you that taxpayers subject to personal income tax or corporate income tax who own assets and rights located abroad as of December 31, 2025, may be required to file a declaration of assets and rights located abroad (form 720) by March 31, 2026.
This form must be submitted electronically (via the Internet); paper submissions are not accepted. Those who, for technical reasons, are unable to submit Form 720 online within the established deadline may do so within four calendar days after the deadline.
For those who have previously submitted Form 720, submission will only be mandatory if any of the combined balances of the three different categories of assets that must be reported (bank accounts, shares, or real estate) have increased by more than €20,000 compared to those that determined the submission of last year’s return. In any case, it will be mandatory to file the return for those assets already declared and in respect of which the taxpayer loses the status that determined the obligation to declare at the time.
Taxpayers must report any assets and rights they hold abroad, including accounts in financial institutions, real estate, securities, rights, insurance, and income deposited, managed, or obtained outside Spain. This reporting obligation does not apply when the value of such assets or rights does not exceed €50,000 for each type of asset or right.
What types of assets and rights are declared?
- Real estate and rights over real estate located abroad. Their identification, location (country, town, street, number), date of acquisition, and acquisition value must be detailed (depending on whether it is full ownership, usufruct, bare ownership, or other cases).
- Accounts in financial institutions located abroad. The name of the bank, its address, the identification of the accounts, the dates of opening or closure, the balance as of December 31, the average balance for the last quarter, and the date on which the status of account holder, representative, authorized person, beneficiary, or person with power of disposal ceased must be included.
- Securities, rights, insurance, and income deposited, managed, or obtained abroad.
- In the case of securities, the name of the entity or third-party transferee must be stated, as well as the address, balance as of December 31, and number, class of shares, and value.
- In the case of rights, rights representing the transfer of own capital to third parties are included.
- About insurance, the name of the insurance company, its address, and the surrender value of the policy as of December 31 must be reported.
- Regarding temporary or life annuities, the name of the insurance company, its address, and the capitalization value as of December 31 must be reported.
About the assets and rights that must be declared, there are several nuances that you should consider, as detailed below:
- Bank accounts with joint ownership must be declared when the balance on December 31 exceeds €50,000.
- Joint ownership of real estate must also be declared when the acquisition value exceeds €50,000 on December 31.
If you filed Form 720 last year because you had bank deposits, securities (shares, investment funds, insurance, etc.) or real estate abroad valued at more than €50,000, you must file this form again in either of the following two cases:
- If the value of your assets increases by more than €20,000.
- Or if you are no longer the owner or authorized representative of any of the assets previously declared.
Who is required to file?
Individuals and legal entities resident in Spanish territory, permanent establishments in said territory of non-resident individuals or entities, and entities with income attribution (joint property, civil partnerships, estates in abeyance, etc.) are required to file this annual information return, if they are owners or authorized users of foreign accounts with a combined balance exceeding €50,000.
Likewise, holders of securities, shares, funds, life insurance, real estate, or any other assets located or deposited abroad, with a combined value exceeding €50,000, are also required to declare this information. In addition to legal owners, and unless an exemption applies that must be carefully analyzed, those known as beneficial owners, i.e., those who own or control more than 25% of the assets through entities with or without legal personality, are also required to declare this information.
There may be many people who are obliged to comply, particularly foreign residents, because it is sufficient to have a small share (even 1%) of one or more accounts abroad with a balance exceeding €50,000 (or even to have nothing and be a simple authorized representative), or to have a small share of a property with a value exceeding that amount.
Penalty regime
Law 5/2022, of March 9, effective as of March 11, 2022, amended the wording of several tax regulations with the force of law (Personal Income Tax Law, Corporate Income Tax Law, and General Tax Law) in order to eliminate aspects of the regulation of the obligation to report assets and rights located abroad that had been declared contrary to European Union law by the recent judgment of the Court of Justice of the European Union (CJEU) of January 27, 2022 (case C-788/19). The ruling concluded that the specific penalty regime associated with non-compliance with the obligation to declare assets and rights abroad (form 720) was contrary to European Union law because it established a disproportionate restriction on the free movement of capital.
Instead of reintroducing a separate penalty regime, the legislator has merely removed the wording of the provisions considered by the CJEU to be incompatible with the free movement of capital, which, in practice, is merely a formal change.
Specifically:
- Fixed fines for failing to report on time or for doing so incompletely, inaccurately, or with false information are eliminated.
- The provisions that classified the value of undeclared assets as unjustified capital gains or undeclared income attributable to the oldest tax period among those not subject to the statute of limitations are eliminated.
- The proportional financial penalty of 150% on the tax liability derived from unjustified capital gains or undeclared income is eliminated.
As the above has not been replaced by a specific regime, any breaches of the reporting obligation are subject to the general penalty regime provided for failure to file returns on time or incorrectly filed returns that do not cause financial damage to the Treasury.
For further information, please consult Tax Advice.
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