Evolution of assets on the basis of form 720

• The Tax Agency launches a new tool for the analysis of the information incorporated into the '720 model' that will allow streamlining, systematizing and strengthening the control of assets and income
• Combined with 'big data' analysis methods, it allows establishing new search criteria for tax risk patterns and their extension to more complex corporate structures.
• The tool shows that the net balance of assets abroad declared in '720' has grown by 6.7 billion between 2012 and 2015, and especially in accounts, funds and real estate
• The need to make real ownership transparent as required by the Special Tax Declaration causes the amount of shares declared in 720 to decrease significantly and the accounts to increase.

 

July 29, 2016.- The Tax Agency has launched a new tool to manage the analysis of the information incorporated by taxpayers in the '720 model' of assets and rights in the foreign. This tool, which will make it possible to streamline, systematize and strengthen the control of assets and income, offers the possibility of establishing the evolution of the net balances of assets declared abroad and shows that, between 2012 and 2015, the value of assets and rights declared in 720, refined based on the modifications and cancellations reported by taxpayers in the model, has grown by 6.7 billion euros, to exceed 97.7 billion. The total amount of assets and rights declared for the first time so far exceeds 141 billion.

The total balance of 97.7 billion in 2015 is broken down into almost 44 billion in securities and rights (shares), more than 20.2 billion in funds, more than 18.3 billion in bank and credit accounts, 11.6 billion in real estate and 3.6 billion in insurance. Between 2012, the first year for which the 720 declaration was required, and 2015, the transfer of declared amounts between two categories of goods and rights is especially notable: accounts and actions. Thus, while the amount of the former increases by more than 3,300 million euros, that of the securities decreases by more than 2,200 million.

This evolution is strongly linked to the need to make ownership transparent that the Special Tax Declaration required, so that the true owner of the assets and rights presented the DTE and also assumed legal ownership of them. As a result, in the 720 forms, taxpayers have been reflecting the cancellation of participations in companies and intermediary structures and the parallel incorporation of assets in accounts in their name.

On the other hand, between 2012 and 2015 the balance of the funds has grown by more than 3,000 million, the amount declared for real estate by 2,200 million and the value of insurance and annuities by 380 million.

 

Distribution by countries and goods 

Taking into account the distribution by country, in 2015 more than a third of the global balance declared was concentrated in Switzerland (almost 20.2 billion) and Luxembourg (close to 13.5 billion). By types of assets, in shares and accounts, Switzerland also stands out (7,400 and 5,900 million, respectively), where, in the 2012-2015 comparison, the transfer of declared amounts between both categories of assets is especially noticeable, with a reduction in values and an increase consequently in accounts.

As for the rest of the categories of goods and rights, in the funds more than 70% of the total corresponds to Luxembourg (more than 8.1 billion) and Switzerland (6.3 billion). Luxembourg is also the first country in terms of insurance balance (1,300 million), while in real estate the largest amounts are in France and the United Kingdom, with close to 2,000 million in both cases.

In turn, while the evolution of equity balances between 2012 and 2015 is marked, in the case of some countries, by specific corporate operations and general investment dynamics, in the case of the decrease in shares in the Netherlands and the increase in funds in Luxembourg, in other cases you can see the gradual process of outcrop of taxable bases, for example, in the fact that Andorra, Panama, Liechtenstein and Bahamas are four of the five countries with the largest decrease in global balances, for an amount set for the four territories of almost 2.3 billion euros.

 

Asset control after 720

The new tool that allows the net balances of each year declared in 720 to be available offers the Tax Agency the possibility of establishing a common thread between the different declarations of the model that are presented annually. This facilitates both the determination of asset variations and taxable events to be regularized, as well as the analysis of a permanently updated situation of assets and rights, for the purposes of collection control.

The conjunction of this instrument with 'big data' strategies and methods will allow greater use of the information available in the Agency's database and massive processing of information, favoring the establishment of new search criteria for risk patterns. tax and its extension to more complex corporate structures.

In this way, the Tax Agency reinforces the control of assets based on the 720 model that it has been maintaining in recent years, and which has already generated, beyond the regularizations that are carried out, a significant improvement in voluntary compliance with the model declarants.

Thus, the tax base declared in the 2014 Personal Income Tax by the 720 filers was already 9.4% higher than that of the 2010 Personal Income Tax, and their full quota had increased by 23.8%, compared to to the decreases registered in the bases and quotas of all personal income tax filers.

 

The following tables are attached to the Press Release:

Evolution of the asset balances declared in the model (2012-2015) Amounts in euros
Asset balances declared in the 720 model broken down by type of asset or right 2012 Amounts in euros
Asset balances declared in form 720 broken down by type of asset or right 2015