The 720 model is an informative return that taxpayers who own rights or assets abroad must file. If you talk to people who have made large profits related to cryptocurrencies, or if you yourself have had income related to these activities, you may be wondering whether or not you should file it. Keep reading and find out all the details.
Who has to file Form 720?
The first thing to keep in mind is that Form 720 is mandatory for all persons whose total assets abroad exceed 50 thousand euros . That is, all those natural and legal persons residing in Spanish territory, all permanent establishments in these territories or non-resident legal persons referred to in Article 35.4 of Law 58/2003. This law stipulates the obligation to report accounts with financial institutions abroad, securities, rights, insurance and income deposited abroad applies to the owner, authorised person, representative, beneficiary or person with dispositive powers.
Thus, they must file a Model 720:
All natural and legal persons residing in the Spanish State (this group also includes those residing in the official territories) and holding assets abroad.
Owners of said assets.
Assets that are declared in 720:
- Accounts and deposits opened with foreign banks.
- Bonds or loans.
- Companies or investment funds.
- Entity participation values.
- Real estate located abroad.
- Life or disability insurance.
Property that is not required to be declared:
- Assets exempt from income tax.
- Goods whose value does not exceed 50 thousand euros.
- Those that are registered in an accounting office.
- Accounts in foreign offices in Spain.
If you are not sure whether you should declare your assets, consult a cryptocurrency and other assets tax advisor.
Two questions our clients ask us all the time:
Should cryptocurrencies on both centralized and decentralized exchanges be considered under the 720 model? The answer is, as of today, NO. As of today, we are awaiting the publication of a regulation that provides for the declaration of this type of asset.
Should cryptocurrencies in wallets be considered under the 720 model ? The answer is NO, as they are expected to be declared under the new model that is pending approval, Model 721 .
How should Form 720 be filled out?
It is best to pay close attention when presenting the 720 model. To fill out this form, you must first log in to the tax agency’s website and access the link that links to this presentation. Remember, you must have a digital certificate or pin key installed on your computer for this step so there is no problem and you can start the process right away. Once you are identified, you will be ready to start filling out the form with the information that will be requested. You must then proceed to register the type of asset you want to register, confirm the declaration, and sign to submit it to Treasury.
The submission period runs from January 1 to March 31 to submit assets for the previous year. And if you share ownership of a bank account abroad and the balance exceeds 50 thousand euros on the date of issue of the model 720? In this case, and whenever the set limit is exceeded, you must report it. This does not depend on how many persons own a co-owner, and should be reflected in the current balance sheet with the percentage of participation.
As we said, although the 720 model is responsive to declaring property overseas, which is not very common, it is highly recommended that you do not skip it.
To learn more, visit our cryptocurrency management page for a practical and very simple example of how to pay taxes if you own cryptocurrencies. Whether it’s a case where capital gains were obtained by selling assets or by acquiring currency while mining (or for any other reason of that type), you will be able to confirm the different models to be followed, the different tax rates with their tax base and the tax consequences that these types of activities require.
To continue to inform you about this topic and more, you can refer to other articles on our blog where you will find links to this topic and more.
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