Obligation to declare property abroad
The Spanish Government, in its fight against tax fraud, has placed foreigners, once again, in a discriminatory situation.
Indeed, as a result of the law 7/2012 of 29th October, all bank accounts, shares, life insurances, real estates, etc. that tax residents in Spain have abroad, have to be declared if their value is higher than 50,000,-€.
With this measure, logically, it is intended to bring any kind of income to light, which can be obtained from abroad and has not been declared or was not meant to be declared. For this reason, the Government sets fines of at least €10.000, – simply if the declaration is not made or not made with accuracy; there are also imposed sanctions, which go up to 150% on incomes that are not declared.
We must distinguish, therefore, between the obligation to submit the declaration, which should be done in the first quarter after each exercise (for 2012, exceptionally, the term is up to the 30.04.13), and the obligation of having to pay taxes on those goods abroad.
The discrimination for a foreigner who has fixed his residence in Spain and who is a Spanish tax subject (of his entire income), can arise from the circumstance that he retains or inherits from his family, accounts, actions or properties in his country of origin, not having any obligation to pay taxes for them in Spain.
Henceforth and independent of double tax agreements or the criterion of territoriality of taxation (for example, the inheritance tax in the country of the inherited property), virtually everything you have abroad must be declared even if it is not anything that has been “taken outside” from Spain trying to hide it.
And it is also an obligation which is of questionable legality, because of the existence of countries without cooperation agreement with Spain or with a banking secrecy; because now the resident is required to declare an account that perhaps that foreign country would not facilitate the Spanish Government through the official channels.
Alejandro Espada Gerlach
Lawyer of Espada Gerlach & Asociados, Abogados
Member of Eurojuris España, international network of law firms
