Do you have to declare your Andorran assets to other countries?
Director of Augé Grup’s Tax Department Marc Urgell Díaz answers:
In compliance with Foreign Investment Law of 2011, if you are not a resident of Andorra, you can be a shareholder of a company incorporated in Andorra and benefit from the corresponding tax advantages.
However, although almost all countries allow their residents to invest abroad, we should have in mind that in some cases, and even if no income is generated by the investment made abroad, some countries require their residents to file an informative statement of its assets held outside the national territory. The purpose of this declaration is not the payment of taxes, but it is a mere solution to control its taxpayers.
This is the case of Spain with the Form 720. In conformity with Spanish law, since 2012, taxpayers have to declare, in an informative way, all assets they hold in foreign countries. Bank accounts, real estate and participation in companies are among the most prominent.
Specifically, is not necessary to present the Form 720 when the assets held abroad are lower than € 50 000. However, while it is easy to determine the amount held in of a bank account, the task is somewhat complicated for the valuation of the shares of a non-listed company. Analyzing and determining the existence of the obligation to declare is a task of a consultant, but providing such advice requires the client to be able to provide all relevant information.
The consequences of not reporting Form 720 or reporting after the deadline can result in significant penalties. Therefore, it is important to take into account this tax declaration and respect the deadlines (until 31 March).
Like in Spain, other countries of which you are resident may require you to declare your foreign assets. Check with your local tax advisor if you are subject to this obligation and do not neglect your tax obligations!
