Law 7/2012 & Informative declaration of assets & gains abroad

Here we are again keeping you up with recent changes. The Spanish Inland Revenue (“Hacienda” from now on) has added further information, in order to clarify, the new two tax rules of high importance: the limitation to cash payments and the informative abroad assets & gains declaration. It was our issue last month.

Law 7/2012 establishes the limit to cash payments in regards with certain type of transactions.

No cash transactions may take place when one or more of the parties involved is a professional or self-employed somehow, and the amount of 2500 euros or over. The limit is extended to 15.000 euros when the payer is an individual who can justify he/she is non- resident of Spain for tax purposes, and is not acting as a professional or self-employed somehow.

When assessing the amounts mentioned the amounts of all the transactions taken place or payments in which the transfer of goods or services provided have been broken down, will be added.

Cash includes notes, coins, checks to the bearer and similar.

The proof of the payments are to be kept for, at least, five years since they took place.

Those who do not comply with this rule will be prosecuted and liable to pay up to 25% of the total cash amount.

Informative declaration of assets & gains abroad

Everyone is to declare (there are some exceptions) bank accounts whose balance is 50.000 euros and over, regardless the number of holders of the accounts involved. The same limit is applied to assets (whatever their nature), whose value is 50.000 euros and over, no matter the number of owners.

Individuals resident of Spain, should they execute their activity and keep their accountancy properly, showing their accounts and positions in financial firms (banks and similar) of which they are holders/owners abroad, are not to declare them. This is exactly the opposite when it comes to assets such as shares, annuities and insurances abroad, because they are to be declared even if thoroughly shown in the accountancy. There is no obligation to inform on pension plans (recurrent payments to them) as long as they have not been paid. When this happens, from this very moment or since it has been redempted, no matter if as a lump sum or as annuities. Once declared form 720, there will be no obligation unless there is an increase of the joint limit established for each block of information (assets and similar) worth more than 20.000 euros. The minimum penalty for not declaring 720 is 10.000 euros, if not complied with once, and 30.000 euros if three times.  

Additional information