Declaring Foreign Assets In Spain

currency-exchange-spainMost people are probably aware of the new regulation regarding the requirement to declare all your overseas assets in excess of 50,000€, but what you may not know is that there are big fines planned for those who don’t comply or who simply make a mistake in their declaration.

The official reason for the introduction of this new measure is to hinder tax evasion and money laundering, but undoubtedly there’s an element of additional income for the Spanish tax office too as many people will either miss the deadline or make mistakes in their declarations and hence will be fined.

First of all the requirement is for all those people who are resident in Spain for tax purposes and has come into force recently, with a deadline of 30 April 2013 for the first declaration of foreign-held assets. The requirement to declare foreign assets again in successive years is only required if the value of any individual asset has increased by more than 20,000€ in a calendar year. The type of assets to declare include:

  • Any accounts held in financial institutions whether or not you’re the account holder. In other words, even if you’re just an authorised user of the account the fact that you can access the money is enough to mean it has to be declared.
  • Property, including rights to property.
  • Shares, stocks, bonds and other similar financial assets.
  • Annuities from insurance policies or pension plans (and similar) whether permanent or temporary.

Assets are valued as follows:

  • Accounts: Balance at 31 December and average balance during the last quarter of the year.
  • Property: Date and value at purchase
  • Shares, stocks, etc: Value at 31 December

For property, take into account that it doesn’t matter if you’re not the sole owner, for example couples or family members who jointly own property abroad would have to declare this along with the percentage which they own (taking into account, of course, the 50,000€ threshold per person).

Pension Plans are excluded from assets to be declared until the moment you receive your annuity or lump sum. At that moment, depending on the amount received, you might have to declare it too.

The fines that have been set up for non-compliance are considerable – up to 150% of asset value and additional fines based on whether the assets should have been included in the annual tax return in Spain over the past years (back as far as the year 2000). Additionally take into account that even if your assets are correctly declared in the country where they are held, this will not be valid as an excuse for any errors or omissions in your Spanish declaration.

So be aware – 30 April is the deadline for declaring assets held abroad and if in doubt we suggest you get professional advice rather than risk being fined. Late declarations will be subject to a 1,500 euros fine also – so get hold of your form “Modelo 720” from the Tax Office as soon as possible!


Important note: This is just a brief guide and if you have doubts please get professional advice.