TAX LAW IN SPAIN: New Obligation to inform the Spanish Tax Authorities regarding assets and rights abroad.

The Spanish authorities are stepping up the fight against tax fraud, especially against undeclared assets for which no tax is paid. Recently new Laws 7/2012 and Royal Decree 1558/2012, have been passed in this regard.

Thus, under this new legislation, our readers have to consider that there are new obligations to report and inform the Spanish tax authorities regarding assets, goods and rights held outside of Spain.

1. ASSETS AND RIGHTS ABROAD WHICH MUST BE REPORTED TO THE SPANISH AUTHORITY.

. – Accounts located abroad, this includes savings accounts, deposits, credit accounts, etc.
. – Shares, rights, insurance policies and annuities deposited, managed or obtained abroad. This includes trusts, pools of assets without legal personality, interests in collective investment institutions, (investment funds), life insurance policies, etc.
– The real estate property and real rights on them, located abroad.
ETC.

2. WHO IS REQUIRED TO REPORT AND INFORM THE TAX MAN:
Amongst others:
– Individuals and companies resident in the Spanish territory.
– Permanent establishments in Spain belonging to non-resident individuals or entities.
-Inheritances before being accepted, or other subject without legal personality, etc.
.

3. THE INFORMATION AND DOCUMENTATION TO BE PROVIDED:
The documentation will depend on the type of assets. Broadly speaking, the first requirement would be that the identification details of the assets or right be provided. Secondly, all details of the entity where the assets or right is engaged. Finally, all the economic details of the assets, that means balances, surrender values, etc., referring to the last day of the year, that is to say to the 31th of December.

4. WHEN YOU ARE NOT REQUIRED TO REPORT:
Amongst others; entities fully exempt of taxes do not need to provide this information, also accounts abroad when they are in banks domiciled in Spain.
Similarly, when all assets of the same kind, together do not amount to more than 50,000 Euros, according to the calculation methods which are set in the laws mentioned above.

5. DEADLINES FOR REPORTING:

The reporting period is set from the 1st of January to 31st of March of the following year. That is to say, the first statement / declaration to the tax man it should be done in the first quarter of 2013, regarding the assets and rights of the year 2012.

The law also predicts penalties for failing to comply with this obligation.

If you find yourself in this situation, and i.e: you are tax resident in Spain but you have assets abroad whose value is above the ones stated, our firm can assist you in fulfilling your obligation to communicate them to the taxman or, where appropriate, consult with the person who normally would assist you with your tax obligations in Spain.

The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

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