Obligation of Information about Goods and Rights Located Abroad

Through the Royal Decree 1558/2012, of the 15 November, by adapting the rules of the Tax Law 58/2003, of the 17 December, the Directive 2011/16/EU on administrative cooperation in the field of taxation has been transposed, especially with regards to the exchange of information necessary for the settlement of taxes. Then on January 31st the HAP/72/2013 Order of January 30 was passed, approving the Tax Form 720, which relates to the Obligation of Information about Goods and Rights Located Abroad. Essentially, this legislation allows for better coordination in obtaining information about tax obligation on EU Member States, although the reporting obligation extends beyond the EU territory and covers open accounts in foreign entities engaged in banking or credit traffic and on certain rights spelled out in the rule, also deposited, placed or managed abroad, including information on property and rights thereto. This will introduce an obligation to report certain assets located abroad and whose value exceeds € 50,000 on December 31 each year, to all natural and legal individuals resident in Spanish territory, to permanent establishments, heritages and civil communities. While in the future this statement shall be filed between January 1st to March 31st, the 2012 statement must be submitted between the 1st February to the 30th April 2013, in accordance with the Sole Additional Provision of Royal Decree 1715 / 2012, of the 28th December. We are now in a position to be much more specific about how to provide advice with regards to this new requirement, not exactly imposed by the Spanish Tax authorities, but by the Directive 2011/16 of the European Union. First of all, please note it must be submitted electronically using a specific electronic signature which in most cases proves very difficult to obtain and you need to be in Spain to do so. So unfortunately it is very unlikely you will be able to file this yourself, and therefore you will require the aid of a professional. Secondly, point out that you are subject to this obligation if:

You are a Spanish resident (this includes any citizen or foreign national residing in Spain, Business entities, Inheritances in abeyance, Partnerships, etc.), or have a permanent establishment in Spain.
When the value of your assets abroad exceed a value of 50,000 € (individually).
Thirdly, we must differentiate 3 different groups of assets which are subject to this obligation, and we will proceed by explaining the information to gather and provide the information to the Tax Authorities:

1. Accounts and deposits with financial institutions located abroad Information to be provided:

Bank name and address.
Swift code, Iban code and account number.
Name of account holders and third parties with access to the account.
Date account was opened or closed.
Date in which any third parties were given access or had their access cancelled.
Balance of the account dated 31st December of the previous year.
Average account balance of the last quarter of the previous year.

2. Values, rights, insurances and annuities deposited, managed or obtained abroad. This group has to be subdivided again into another 5 subgroups:

a. Values located abroad: Information to be provided:

Company name or full name of the legal entity.
Confirmation of registry details of the company or entity.
Value of the shares dated 31st December of the previous year.
Vale of the share capital or equity capital dated 31st December of the previous year.
Number and class of shares you hold.

b. Rights located abroad: Information to be provided:

Company name or full name of the legal entity.
Confirmation of registry details of the company or entity.
Value at 31 December of the securities transferred to third parties for capital or securities contributed to the legal instrument.
Value, number and class of securities or the securities provided by such shareholder.

c. Shares in the share capital or endowment of collective investment institutions located abroad: Information to be provided:

Company name or full name of the legal entity.
Confirmation of registry details of the company or entity.
Value at December 31 shares held, number and type

d. Life and disability insurance when the insurer is located abroad: Information to be provided:

Company name or full name of the legal entity
Confirmation of registry details of the company or entity
Surrender value at 31 December.
The policyholders personal details

e. On temporary or lifetime income obtained as a result of the delivery of a capital in money, or economic rights of real or personal property: Information to be provided:

Company name or full name and address of the insurance company
Value of income capitalization at 31 December
Identification of the beneficiary

3. Immovable property or rights in immovable property situated abroad: Information to be provided:

Country or territory in which you are located.
Address
Acquisition date

Acquisition value * Note: The obligation extends to any taxpayer who had been the holder or beneficial owner of securities or rights during 2012 but no longer is on December 31st, and must provide the information on the date on which such termination occurred. Finally, please note that the last day for filing the information (Form 720) for 2012 will be on the 30th April 2012. What would be the applicable penalties be in case this annual statement is not filed? According to paragraph 2 of the Eighteenth Additional Provision of Law 7/2012, of October 29, the consideration of the offense is very serious and is punishable in accordance with the following rules: The penalty consists of a 5,000 Euros fine per item or set of data on the same account, asset or Real Estate property, which should have been included in the statement or had been provided incomplete, inaccurate or false, with a minimum of 10,000 Euros. The penalty shall be 100 EUR per item or set of data on the same account, asset or liability or property with a minimum of 1,500 Euros, when the declaration was filed after the deadline without prior notification from the Tax Office. Likewise, if the filing of the anual statement is not done electronically via the internet or via written communication it would also be sanctionable.

Obligation of Information about Goods and Rights Located Abroad

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