Relocating to Spain for work, entrepreneurship, or remote employment can have significant tax implications. For many international professionals, the Beckham Law—formally the Special Tax Regime for Displaced Workers—is a key factor in Spain’s appeal as a destination for global talent.
It is important to note that Form 720 is purely declarative. Filing this form does not in itself trigger the payment of tax on the assets declared.
Its purpose is to inform the Spanish Tax Authorities (Agencia Tributaria) about the existence and value of foreign assets and income held outside Spain.
The declaration forms part of Spain’s tax transparency and anti-tax evasion framework and allows the tax authorities to monitor overseas assets held by Spanish tax residents.
The obligation to file Form 720 is regulated under Articles 42 bis, 42 ter and 54 bis of the General Regulation on tax management and inspection procedures (Royal Decree 1065/2007).
This filing obligation applies to both individuals and legal entities that are considered tax residents in Spain. It also extends to certain entities without legal personality, such as unadministered estates (herencias yacentes), joint ownership arrangements (comunidades de bienes), and similar structures.
If you are a tax resident in Spain and meet the relevant legal criteria, you may be required to submit Form 720 to declare qualifying assets or rights held outside Spanish territory, regardless of whether those assets generate income.
Declare your overseas assets in Spain correctly
Spanish tax regulations group foreign assets and rights into three separate categories, which operate independently. If the combined value of the assets within any one category exceeds €50,000, all assets belonging to that category must be declared, even if individual assets are below the threshold.
This category includes more than just standard current accounts. It covers any type of bank or financial deposit, such as current and savings accounts, fixed-term deposits, and credit accounts held outside Spain.
The obligation to declare applies not only to account holders, but also to individuals who are authorised signatories or joint holders. In these cases, the full account balance must be reported, indicating the taxpayer’s percentage of ownership or their authorised status.
For each account, information must be provided on the financial institution, account identifiers, bank address, opening date, and the relevant balances.
This category includes residential and commercial property located abroad, such as houses, apartments, commercial premises, land, or rural properties.
It also covers rights in rem, including usufruct, bare ownership, and rights of use or habitation, as well as timeshare arrangements that grant usage rights over foreign real estate.
In general terms, the declaration must identify the property’s location, the date of acquisition, and its acquisition value, calculated using the applicable exchange rate as of 31 December of the relevant tax year, in line with the criteria confirmed by binding tax ruling V2669-17.
This is often the most complex category and commonly affects taxpayers with diversified investment portfolios. It includes:
From a practical perspective, state pensions paid by foreign governments are generally not declared under Form 720. Foreign private pension schemes have been the subject of debate, but the prevailing interpretation is that they are not reportable until benefits are accessed. Nevertheless, individual analysis is strongly recommended in these cases.
Comply with Spanish asset reporting with confidence
Form 720 is an annual declaration, but it does not have to be filed every year by all taxpayers. The obligation depends on when the reporting thresholds are met and whether certain changes occur in later years.
There are two main situations in which Form 720 must be submitted.
If you are a tax resident in Spain and, as at 31 December of a given year, the value of assets in any one of the reportable categories exceeds the €50,000 threshold for the first time, you must file Form 720 for that tax year.
The obligation arises independently for each asset category. Exceeding the threshold in one category does not automatically require reporting assets in other categories.
In later tax years, Form 720 must be filed again only if one of the following situations applies.
1. Increase in Value of More Than €20,000
You must re-file Form 720 for a given asset category if the combined value of that category has increased by more than €20,000 compared to the last declaration filed.
This increase is assessed by comparing the values or balances as at 31 December of each relevant year.
2. Cancellation or Loss of Ownership or Control
This is one of the most commonly overlooked triggers and a frequent source of penalties. Form 720 must be filed to report that:
Even though the asset no longer exists, the change itself must be reported.
3. Exceeding the Threshold in a New Asset Category
If you previously declared assets in one category only, but in a later year exceed the €50,000 threshold in a different category, a new filing obligation arises for that category.
For example, a taxpayer may initially declare foreign real estate only, and later be required to declare foreign bank accounts once the relevant threshold is exceeded.
| Asset Category (Blocks) | Initial Filing Threshold | Requirements for Subsequent Years (Updates) | Included Assets |
|---|---|---|---|
| Block 1: Bank Accounts | > €50,000 (Total balance as of Dec 31st or average quarterly balance) | If the total balance increases by more than €20,000 or if any account is closed. | Current accounts, savings accounts, fixed-term deposits, and credit accounts. |
| Block 2: Securities and Income | > €50,000 (Total value as of Dec 31st) | If the total value increases by more than €20,000 or if ownership of any security is terminated. | Shares, investment funds (CIS), life insurance policies, and annuities. |
| Block 3: Real Estate | > €50,000 (Acquisition value or real rights) | If the total value increases by more than €20,000 or if any property is sold. | Houses, apartments, land, usufructs, and timeshares. |
Example 1: New Spanish tax resident with foreign assets
John moved to Spain in 2025 and became a Spanish tax resident. He owns an apartment in the UK valued at €200,000 and holds a UK bank account with a balance of €10,000.
As at 31 December 2025, he exceeds the reporting threshold in the real estate category. As a result, he must file Form 720 by 31 March 2026 to declare the foreign property. The bank account does not need to be declared, as it does not exceed the threshold for that category.
Example 2: Married couple with a joint bank account (co-ownership rule)
Susan and David are tax residents in Málaga. They hold a single joint bank account in the Isle of Man with a balance of €80,000, owned 50% each.
Because the account balance exceeds €50,000, both Susan and David are required to file Form 720 individually.
In their respective declarations, each will report the full account balance of €80,000 and specify their 50% ownership interest.
A common mistake is assuming that no declaration is required because each person’s share is €40,000. This assumption is incorrect.
Tax advisors specializing in international taxation assist expatriates in navigating the Spanish tax system. With over 20 years of experience, I provide tailored tax plans to optimize tax efficiency, ensuring compliance with regulations and minimizing dual taxation.
Form 720 must be filed by 31 March each year to report qualifying foreign assets held during the previous calendar year. The official filing window runs from 1 January to 31 March, and the form may be submitted at any point within this period, but never after the deadline.
Form 720 must be filed electronically through the Spanish Tax Agency’s online platform (Sede Electrónica de la Agencia Tributaria). Submission requires a digital certificate or Cl@ve authentication. Paper submissions or in-person filings are not permitted under any circumstances.
Form 720 is not simply a list of foreign assets. It requires accurate reporting of values, balances, exchange rates, and ownership as at 31 December of the relevant tax year.
Professional tax advice in Spain helps ensure that the information declared is consistent, properly supported, and defensible if reviewed by the Spanish Tax Authorities, particularly where assets were acquired before becoming tax resident in Spain.
Avoid Modelo 720 penalties with specialist legal support
Before 2022, penalties associated with Form 720 were considered disproportionate and, in some cases, exceeded the value of the undeclared assets. Following legislative changes and EU case law, the current penalty regime has been aligned with that of other informative tax declarations in Spain.
Even under the revised framework, failure to file Form 720 can still result in significant administrative penalties.
As Form 720 is an informative declaration, penalties are governed by Articles 198 and 199 of the Spanish General Tax Law (LGT). The penalty level depends mainly on whether the taxpayer files voluntarily or only after a formal request from the Tax Agency.
Voluntary late filing
If the declaration is submitted after the deadline but before any formal notification from the authorities, penalties are substantially reduced. In these cases, a fixed fine of approximately €200 may apply, with additional charges of €10 to €20 per data item. Filing by non-electronic means carries a fixed penalty of €250.
Filing after a formal request
If the Tax Agency initiates an inspection or formally requests the information, penalties are more severe. Failing to file or submitting incomplete information may lead to fines between €300 and a higher amount €20,000, depending on the volume of information involved. In these cases, the penalties per data item range from €150 to €200.
Under the Beckham Law (Article 93 of Law 35/2006 on Personal Income Tax), certain taxpayers are considered tax residents in Spain for administrative purposes but are taxed under the Non-Resident Income Tax (IRNR) regime.
One of the key consequences of this special regime is that taxpayers covered by the Beckham Law are not required to file Form 720, as they are taxed as non-residents and are therefore not obliged to declare assets located outside Spain, such as foreign bank accounts, properties, or investments.
It is important to note that this exemption is strictly personal. As highlighted by Rosana Tejada, a tax lawyer specialising in international taxation, family members residing in Spain—such as spouses or children—are not automatically covered by the Beckham Law. If they are not individually eligible for the regime and hold foreign assets exceeding the relevant thresholds, they may still be required to file Form 720.
Many Spanish tax residents are unaware that Form 720 is not the only reporting obligation relating to foreign assets. In some cases, a separate declaration known as Form ETE (Encuesta de Transacciones Exteriores) may also apply.
Form ETE is filed with the Bank of Spain, not the Spanish Tax Agency, and its purpose is statistical and related to the monitoring of cross-border capital movements.
It is used to report financial transactions with non-residents, as well as positions in foreign assets and liabilities. The obligation generally applies to individuals or companies resident in Spain whose foreign transactions or positions exceed €1,000,000. Depending on the volume involved, the filing may be annual, quarterly, or monthly, although in most cases it is submitted annually.
Yes. Although the Court of Justice of the European Union ruled against the disproportionate penalty regime in 2022, the informative obligation itself remains in force. Spanish tax residents must still declare qualifying foreign assets if the relevant thresholds are exceeded. Failure to file or filing late can still lead to fines and tax inspections.
Generally, foreign state pensions do not need to be declared, as they are not considered a “disposable” asset. However, private pension plans (such as SIPPs) might require declaration if the right to draw benefits has been triggered. We recommend an individual assessment for these cases.
Assets must be converted into euros using the official European Central Bank exchange rate applicable on 31 December of the year being declared. This applies regardless of when the asset was acquired.
No. Since the 2023 tax year, cryptocurrencies held on foreign custodial platforms are reported separately on Form 721. While the reporting thresholds are similar, this declaration is independent of Form 720.
This depends on the tax regime applied. Holding a Digital Nomad Visa does not automatically provide tax exemptions.
A prior tax analysis is strongly recommended to confirm which regime applies and to avoid unnecessary reporting obligations.
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