The persons and organizations residents in Spain in 2013, who have some kind of connection to assets and rights, situated outisde of Spain have again a very important appointment with the Spanish Treasury Department.
SInce the 1st of January until the 31st of March 2014 must be submitted the Annual Statement 720, corresponding to the fiscal year 2013 (“An informative declaration about assets and rights abroad”), and in the case of breach the fines and consequences could be very serious.

For the first time this obligation was established in Spain for the fiscal year 2012 and the corresponding Annual Statement corresponding to the mentioned fiscal year had to be submitted until the 30th of April 2013.
With the Annual Statement 720, which can only be submitted by the Internet, there must be detailed information provided to the Spanish Treasury Department about three kinds of assets and rights situated abroad: bank accounts, securities (including funds, securities, trust) and real estate.

WHO IS OBLIGED TO DECLARE?
In principle, the Annual Statement 720 2013 must be submitted by those persons residents, who are owners of these assets and have had some other type of connection to the same (representation, right of disposal, usufruct, etc.) when the combined value in any of these three kinds of assets is superior to 50.000 Euros.
There may be many people, who are under the obligation to submit, in particular foreign residents, as it is enough to have a small part (eventhough it is only 1%) of one or various bank accounts abroad, with a balance higher than 50.000 Euros (or even not having anything except a simple authorisation), or having a small part of a property with a higher value than the one mentioned.

ONE MUST NOT SUBMIT THE SUBMITTED IN 2012 IF THE GROUP OF ASSETS HAS INCREASED WITH LESS THAN 20.000 €
Those persons who have submitted the Annual Statement 720 2012, because the value was higher than 50.000 Euros in one or various groups of assets abroad (bank accounts, securities or real estate), are NOT under the obligation to submit the Annual Statement 720 2013 for the group of assets that has maintained itself and that has NOT suffered an increase superior to 20.000 € in 2013 with regard to the value declared in 2012.
THE LOSS OF CONNECTION TO ANY KIND OF DECLARED ACTIVITY IN 2012 MUST BE REPORTED
It is obligatory to submit an Annual Statement in relation to those assets declared in 2012, with which the connection has been lost in 2013.
For example, if before the 31st of December 2013 a declared account in 2012 has been cancelled (or one ceases to be authorised), or shares or funds have been sold, an Annual Statement must be submitted, reporting the date of these transactions and the balance or value at that moment. And if a property has been sold one must also declare the transfer value.

SUBMITTING AN ANNUAL STATEMENT IN 2013 IF IT HAS NOT BEEN SUBMITTED IN 2012?
There are many persons residents, who did not submit the Annual Statement 720 in 2012, although they were obliged to, due to lack of awareness or simple rebelliousness.
In fact, the experts of the Spanish Treasury Department estimate that only 4.9% of those under the obligation to submit, submitted the Annual Statement (131.411 people of a total of 2,6 million of possible persons under the obligation to submit).
Now, all these people have to consider whether they want to regularize their situation in Spain, by submitting the Statement past the deadline, and in their case the Statement 720 2013. They should think it well and have very specialized legal advice, owing to the fact that submitting the statement 720 2012 past the deadline could be a “fiscal suicide”.

VERY SERIOUS CONSEQUENCES FOR NOT DECLARING OR DECLARING PAST THE DEADLINE
The fine for not submitting the Statement is of 5.000 Euros per detail, with a minimum of 10.000 Euros for each group of assets. The fine for submitting it past the deadline is of 100 Euros per detail with a minimum of 1.500 Euros for each group.
In any case, the most serious consequence is being applied for not complying with the obligation to inform, as well as submitting it past the deadline, and the Spanish Treasury Department could consider that the assets abroad are not justified Capital Gains and charge for it Income Tax of up to 52% on its value, and an additional fine of 150% on the mentioned amount. And this is even in the case when these assets and rights come from expired periods.
It is so exaggerated and illogical that some advisors are suggesting the offenders NOT to submit past the deadline the statement 720 2012 and will probably advise them not to submit the 720 2013.

SOMETHING SIMPLER DECLARE BY TELEMATIC MEANS
It is obligatory to submit the Statement by telematic means, but the news regarding the Statement 720 2012 is that it is not necessary to have an electronic certificate, which requires a somewhat complicated procedure. The Statement 720 2013 can be submitted by the liable taxpayers with an access code (PIN24H), which can be obtained in a very simple way in the offices of the Spanish Tax Department or applying for it through the webpage of the Spanish Tax Department: www.aeat.es

OUR COMPLAINT AGAINST THE STATEMENT 720 CONTINUES IN BRUSSELS
In February 2013 owr law firm, DMS CONSULTING, reported Spain for imposing this informative obligation in so demanding terms and with such a tough and exaggerated penalty regime. In our opinion, it is clearly against the European Union Law and the Spanish Constitution.
The European Commission has informed us that Spain has already replied to our complaint and that soon we will be presented to their conclusions. It would certainly not be before the term for submitting the Statement 720 2013 ends (31/3/2014), but we believe that they will start infringement proceedings against Spain, which could end up before the European Union Court of Justice.

CONCLUSION
We, therefore, recommend people to collect, as soon as possible, all the information necessary in order to submit the Annual Statement 720 2013, having in mind that the period established for presenting it ends on the following 31st of March 2014. If the Statement for 2014 has not been submitted, it would be convenient to collect also the information of the mentioned fiscal year and consider regularizing the situation, as the exchange of information between Tax Authorities of the different countries (especially from the EU) works better and more each time.
To this end, the professionals from DMS CEB CONSULTING (lawyers, economists, tax advisors) offer our services to any person or entity, who needs expert advice, related to this “dangerous” obligation, ensuring the correct completion and submitting of the Annual Statement 720.