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:

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 31^st December of the previous year

Average account balance of the last quarter of the previous year

Values, rights, insurances and annuities deposited, managed or obtained abroad.

This group has to be subdivided again into another 5 subgroups:

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

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.

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

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

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

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.

At Lexland Solicitors we are able to solve any questions regarding this matter and also represent you with regards to this matter on an annual basis.  Please contact us for further information by phone on +34.902.555.299 or by email to comunicaciones@lexland.es  

 Spain requires urgent measures to curb and place a stop signal to the executions of unpaid mortgages and evictions. Even the two main political parties tried to come to an agreement given the gravity of the situation, especially when there has been a increase in suicides by people who were about to be evicted from their homes.

A new Royal Decree-Law 27/2012 has been published with regards to urgent measures to strengthen the protection for debtors. In its explanatory memorandum it states that "attention to the exceptional circumstances facing our country, motivated by the economic and financial crisis, in which many people who took on a mortgage loan to purchase a primary residence are in trouble to meet their obligations, requires the adoption of measures which, in various forms, help alleviate the situation of the debtors'

This new norm of just two articles but with an additional disposal, another transitory and two final provisions has as a key point Suspension of evictions of primary residences, particularly for vulnerable groups.  The question is: Who are included in these groups? (Article 1.2 RD-Law 27/12):

• Large Families, in accordance with current legislation.
• Single parent families with two dependent children.
• Family units in which there is a child under 3 years of age.
• Family units in which some of its members have a declared disability of over 33 %, dependency status or a disease that incapacitates them permanently to perform any kind of work activity.
• Family units in which the debtor is unemployed and has exhausted all unemployment benefits.

f)     The family units who live in the same household, in which one or more members who are united with the debtor or spouse by blood relationship to the third degree of consanguinity or affinity, and who are have a declared disability of over 33 %, dependency status or a disease that incapacitates them temporarily or permanently to perform any kind of work activity.

g)    Family units where there is a victim of domestic violence, in accordance with current legislation, in the case that the property to release constitutes their primary residence.

However the norm sets that for the application of the suspension of the eviction process, they must also attend a series of circumstances (article 1.3 RD-Lay 27/12), like for example the total amount of income of the family unit which has to be within the limits that have been set or that there is sufficient proof of a significant alteration in the family units circumstances.

When do you provide to do this? The article 2 of RD-Law 27/12 sets that you can file the proof at any stage of the mortgage execution process and before the eviction process takes place, to the judge or notary in charge of the procedure.

For more information with regards to this matter please don’t hesitate to contact us via comunicaciones@lexland.es  or +34 952 77 88 99, and someone will be happy to assist you.