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TAXES

Deadline looms for key assets declaration

If you're a tax resident in Spain but have property or financial assets outside the country worth €50,000 or more, you are legally obliged to inform Spain's finance ministry. But you'll need to hurry: the deadline is Monday April 30th.

Published: 23 April 2013 11:43 CEST
Deadline looms for key assets declaration
Spain's new offshore asset reporting requirements are designed to fight tax evision. Photo: Karen Roe

The new reporting requirements are part of a law passed last year by Spain's finance ministry and are aimed at cracking down on fiscal fraud.

The period for declaring these assets began on February 1st but only days now remain. The cut-off date is April 30th. 

The declaration process can only be carried out online by completing the so-called Modelo 720 (720 form).

"The Modelo 720 is a new reporting requirement in Spain and is in addition to the existing reporting requirements. It applies to all Spanish tax residents, including the Spanish," Barry Davys, Partner at The Spectrum IFA Group in Spain told The Local.

Get the latest exchange rates and transfer money on The Local's Currency page.

"The form 720 is perhaps best described as a 'census'," said the financial advisor.

"It is not introducing any new taxes but it is designed to make sure that we all pay the taxes we should be paying."

"More specifically, the 720 is a requirement to report overseas assets. These are broken down into three categories: bank accounts, property and all other financial interests," he explained.

"Where the total assets in any one or more of these categories is more than €50,000, all assets in that category have to be reported.  As an example, someone with three bank accounts with €20,000 in each account and another account with, say, €1, they will have to declare all four accounts."

The Barcelona-based financial advisor said that not all aspects of the reporting process were immediately obvious. He cited the requirement to report the purchase price of a property rather than its current value as being one such example.

He said his firm had been advising clients to take advice from suitably qualified accountants or lawyers to ensure the form is completely correctly.

The form itself is only in Spanish and an electronic signature is required to complete it.

If you do not yet have an electronic signature with the Ministry of Finance, you may not be able to obtain this in time. However, accountants and tax lawyers have access to electronic signatures which they can use to process your declaration.

The Ministry of Finance has a list of frequently asked questions (in Spanish) about the reporting requirements on its website. 

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TAXES

Beskæftigelsesfradraget: What is Denmark’s employment allowance?

Denmark's government may soon announce changes to its tax reform plans, which will give all wage earners a bigger employment allowance. What is this and how will it affect foreigners' earnings?

Published: 30 October 2023 15:21 CET
Beskæftigelsesfradraget: What is Denmark's employment allowance?

What is the employment allowance? 

The Beskæftigelsesfradraget (from beskæftigelse, meaning employment, and fradrag, meaning rebate) was brought in by the centre-right Liberal Party back in 2004, the idea being that it would incentivise people to get off welfare and into a job.

Everyone whose employer pays Denmark’s 8 percent AM-bidrag, or arbejdsmarkedsbidrag, automatically receives beskæftigelsesfradraget. Unlike with some of Denmark’s tax rebates, there is no need to apply. The Danish Tax Agency simply exempts the first portion of your earnings from income taxes. 

In 2022, beskæftigelsesfradraget was set at 10.65 percent of income with a maximum rebate of 44,800 kroner. 

How did the government agree to change the employment allowance in its coalition deal? 

In Responsibility for Denmark, the coalition agreement between the Social Democrats, the Liberals and the Moderate Party, the new government said it would set aside 5 billion kroner for tax reforms.

Of this, 4 billion kroner was earmarked for increasing the employment allowance, with a further 0.3 billion going towards increasing an additional employment allowance for single parents.

According to the public broadcaster DR, the expectation was that this would increase the standard employment  allowance to 12.75 percent up to a maximum rebate of 53,600 kroner. 

How might this be further increased, according to Børsen? 

According to a report in the Børsen newspaper, the government now plans to set aside a further 1.75 billion kroner for tax reforms, of which nearly half — about 800 million kroner — will go towards a further increase to the employment allowance. 

The Danish Chamber of Commerce earlier this month released an analysis in which it argued that by raising removing all limits on the rebate for single parents and raising the maximum rebate for everone else by 20,300 kroner, the government could increase the labour supply by 4,850 people, more than double the 1,500 envisaged in the government agreement. 

According to the Børsen, the government estimates that its new extended allowance will increase the labour supply by 5,150 people.  

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