Expats in Spain are being reminded that if they hold over €50,000 in assets abroad, they are required to complete this tax return before the end of the March 2020 deadline.
Over 5,000 taxpayers were fined by 2018 on failing to disclose they held assets abroad because most expats are not aware of the requirements.
For example, a retired British couple living in permanently in Spain whilst owning two properties in the UK, receive UK based pensions and have open British bank accounts are regarded as tax resident in Spain. Both of them now need to submit the Spanish tax form 720.
We stress the fines for non-compliance are the steepest we've ever seen"
"We stress the fines for non-compliance are the steepest we've ever seen," Raymundo Larraín Nesbitt of Larraín Nesbitt Lawyers said.
Tax residency is applied if and individual spends over 183 days in the country within a calendar year, has Spain as his or her centre of financial interest and has underage children and/or a spouse living in the country.
The three reporting categories are immovable property, investments and bank accounts and there's an obligation to report every asset held in each category should the value of total assets in each be more than €50,000. Individuals have until March 31 2020 to file their submissions.
Fines for late or mis-filing start at €5,000 per error and a minimum of €20,000 for each asset group. The penalty for unpaid income tax is a whopping 150%.