Tuesday, March 24, 2015

Modulo 720 time

The horrible day has arrived when I am actually going to have to file the dreaded “informative” 720 form for the Spanish tax agency. Deadline is end of the month.

But first a joke:

A man knocks on the door of a shop saying “I’m a tax inspector, please open up”. The owner opens the door and the man pull out a gun and says “I lied. I’m just here to rob you!” “Thank God!”, says the owner.

The 720 is the equivalent of the US FBAR form, and as a US citizen living in Spain you now have the joyful privilege of filling out two copies of the similar information, except you have to do all the calculations differently. Also, everything that is excluded from one is included in the other.

There are a couple really stupid parts of this declaration:

  • Bank accounts: you have to declare the average balance in the last trimester (Oct-Dec). Not only that, but you also need to convert it to Euros. Thankfully there is a clarification that you can calculate the average using the local currency and then convert it to Euros on the Dec 31st rate. Thank God for small mercies.
  • Stocks: if you like trading stocks, this is a freaking pain in the ass. Instead of just declaring your brokerage account, you need to declare each stock individually, and if you bought lots on different days, each lot ends up with a separate entry.

If you make a mistake, the fines are astronomical, starting at 10.000 euros.

Realize that when you declare something on the 720, you can expect a letter from the wealth tax collectors thereafter, wondering why you haven’t paid up.

For the sake of anyone who wants it, I made a short program in C# that can read and write the crazy fixed ascii file format that they use (I used it to generate the 720 file and then import it into their web app):


Anonymous said...

Not looking forward to having to do this one either... Is this the first year people actually have to file this "informative form"?


santcugat said...

Our 6 year Beckham Law exemption expired last year, so this is the first year that we have to do the 720.

santcugat said...

For residents that were already here, the first 720 was due last year.

Anonymous said...

Ah, Beckham... had forgotten about that one... I'll be due next year, since 2014 will be my first year as a resident of Spain. Will be looking forward to any updates and/or tips regarding the filing of this form (or taxes in general for that matter).

Thanks again for your blog.