Model 720 and 721 for foreign assets. Filing in March and updates for 2023
As in previous years, and despite the ruling of the community authorities regarding the sanctioning regime, this March must once again verify whether we are obliged to submit the Model 720 for foreign assets.
Additionally, this year a new Model 721 has been published, in which cryptocurrency holdings deposited abroad must be declared if they exceed 50,000 euros as of December 31, 2023.
We explain it below.
The deadline for individuals and/or legal entities residing in Spain in 2023 who own or have had assets and rights outside the Spanish territory, being holders or authorized at any time during the year, ends on March 31. Legal entities may be excluded if this information is well reflected in the accounting records.
The following information must be provided to the Spanish Tax Agency (AEAT):
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Information on bank accounts.
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Information on securities or rights representing participation in the capital or equity of any legal entity.
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Information on assets and real estate.
The taxpayer must report on the assets and rights they have abroad, including accounts in financial institutions, real estate, stocks, securities, rights, insurance, deposited income, or any other asset managed or obtained outside Spain.
The Tax Agency distinguishes between these three categories (accounts, securities, and real estate) to determine if there is an obligation to declare. Thus, if as of December 31, the balances of bank accounts do not exceed 50,000€, there is no obligation to report it, if the average balance of the last quarter does not exceed this amount either. The same applies to securities and real estate, with a limit of 50,000 euros per category. However, there may be an obligation to declare if accounts, securities, or real estate abroad have been canceled or transferred in the current year.
Regarding the filing of this model in subsequent years, it will be mandatory when the average balance or combined balances experience an increase of more than 20,000 euros compared to the last declaration or if any of the assets declared in previous years have been transferred or canceled.
As a new requirement for 2023, individuals with cryptocurrencies abroad are obliged to declare them if their position as of December 31, 2023, exceeds 50,000 euros.
While the sanctioning regime has improved after the community judgment, it must be ensured that assets are declared correctly to avoid penalties.
For any questions or clarifications, you can contact our office, especially if you have assets abroad that were not declared in previous years.