You and your taxes in Spain

Here on the Costa, spring really has arrived. Semana Santa, of course brought its usual rain shower, but this weekend the beaches and chiringuitos are chocked full of people, its 27 degrees and the sun is out till nearly 2100, you could be thinking it’s the most wonderful time of the year. Then you realise it´s time to pay your taxes, but rest assured in the next few weeks we will be bringing you a basic guide on how to do all this.

This week it was the deadline to submit the Tax Form 720. This applies to all residents of Spain with assets of more than €50,000 outside of the country. If you have less than this, you do not need to declare it.

If you are new to this, this is a Law that came out in 2012 which sets out that all residents must declare all their foreign assets of over €50,000 to the Spanish Revenue. The Law was hugely unpopular, and the fines system is draconian. Indeed the regime has been subject to countless investigations and castigations from Brussels and the EU. With that said, the Law does remain in force and if it applies to you should be aware that the fines for late submission start at €100 a day.

You can obtain form 720 on the http://www.agenciatributaria.es/ website, it must be filed online but it is best to get professional help filling the form out before you submit it. The Spanish Government want to know about 3 groups of assets. Property abroad, pensions and investments abroad, and bank or building society accounts abroad. They want to know the value at the beginning and the end of the Tax year, 31st December to 31st December, which can catch people out. It may be that an investment or property in the UK has not gone up in value in the last 12 months but since the pound has risen against the euro the value will increase and this must be taken into account.

For Bank or Building Society accounts you should obtain an average balance from your bank, usually a graph or printed document which shows the average balance from across the year. This needs to be sent in along with the actual balance as of 31st December. If you have property abroad, you should also declare it even if you share the property with others.

The fines, as mentioned are a tad strong. Failure to declare any asset will attract a fine of €5000 per item, with a minimum of €10,000. Late submissions will cost €100 per item with a minimum of €1500, and failure to submit the form on line attracts the same. The Spanish Revenue claim they are currently investigating nearly 7000 individuals in relation to this, and have fined a Swiss National a whopping €470,000 on undisclosed foreign capital gains. The strong advice is to get professional advice with any foreign assets over €50,000.

In the next couple of weeks we will be explaining why the Spanish get their tax forms from Tobacco shops, just what the PADRE system is and keeping you ahead on how to get your Spanish tax sorted.

Patrick Grant EMLE
MiMarbellaNow’s Legal Beagle

‘The contents of the above is for information purposes only and is not a substitute for specific advice or legal advice on a particular matter. This blog is provided by a third party, Patrick Grant EMLE, and therefore we accept no liability for the above content or for the consequences of any actions taken on the basis of any such information’.

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