Expats in Spain should contact their IFA on new overseas assets rules
The millions of expats of all nationalities who are tax resident in Spain, that’s all those who spend more than 183 days in the country, have until 30th April to declare any overseas assets worth more than 50,000 euros in any single asset class to the Spanish tax authorities.
Failure to do so could result in extremely heavy fines and additional taxes on top – therefore, expats are advised to ask their financial adviser sooner rather than later about the various genuine, efficient solutions to these new reporting requirements.
Not only should people seek professional advice in order to learn about the ways to mitigate the reporting obligations, but they should also contact an adviser because the process of submitting the required 720 declaration form for an individual is extremely long-winded and extraordinarily complex as it has to be done with e-codes using a government website. Plus, of course, it will be even more complicated for those who don’t speak Spanish.
The latest declaration measure is, in my opinion, clearly an attempt to bolster the Spanish Treasury’s dwindling funds and, due to the scale of Spain’s economic woes, I suspect that the authorities will be taking a very strict line with anyone caught not declaring their assets.
The Spanish tax office, better known as ‘La Hacienda’, says it could issue a tax of 52 per cent, plus a fine of a massive 150 per cent of the 52 per cent to those who do not report their overseas assets worth more than 50,000 euros.
Spain’s new declaration regulations, which will make reporting offshore assets an annual obligation from now on, come into effect following the tax amnesty coming to an end, whereby tax residents with undeclared overseas assets were able to report them to the taxman, and pay a maximum of 10 per cent.