What foreign deposits are more profitable than national brand ones it is no secret. It is only necessary to see how some entities such as Bankia offer them in their catalog at 0%, while banks such as ING have withdrawn them from their catalog or others, such as WiZink, have reduced their profitability considerably. Against this background, it is not surprising that many savers look at the deposits of banks in the Czech Republic, such as J&T Banka, or Slovakia, such as Privatbanka, entities that offer some of the most profitable deposits.
Also, some offers from states such as Italy or Estonia can be very attractive in the eyes of Spanish savers, since, according to the financial comparator HelpMyCash.com, both countries do not apply any type of tax withholding on the interest generated by open deposits as long as the holder of the deposit resides abroad.
However, the interest generated Outside of Spain, they must be declared in the income of the corresponding year And unlike the interest received on national brand savings products, the earnings will not appear in the draft, so they will have to be entered manually, but how is this process carried out?
How to declare the interests obtained abroad?
If interest has been obtained from foreign accounts or deposits, they must be entered in the full income field, located in the Accounts and deposits and financial assets interests box in general, which can be found within the block corresponding to the returns on movable capital.
In case of having obtained any type of interest or income in Spain, in the draft of the declaration, these amounts can be found within the same box, so the following must be added. gross interest generated abroad to profits obtained in Spain and include the resulting figure in the draft.
What is the withholding?
The returns obtained by a deposit, whether national or foreign, taxed before the Treasury according to a series of tranches depending on the amount generated. Thus, for example, all those interests of up to 6,000 euros will be taxed at 19%, while the following 44,000 euros will be taxed at 21%. In case of having generated more interest, any income greater than 50,000 euros will be taxed with 23%. However, for the income obtained in 2021 and onwards, a new tranche is added: earnings that exceed 200,000 euros will be taxed at 26%.
Although many countries do not practice any withholding on the interest generated in the products contracted by foreign clients, some others do. In the best of cases, it is possible to reduce taxation to 0% in countries such as Bulgaria, Belgium and Slovakia, for example, if a certificate of tax residence is presented in Spain so that the country in which it has been open a deposit do not practice any retention. Nevertheless, not in all countries it is possible to carry out this total reduction. For example, in Portugal it is possible to reduce withholding from 28% to 15%, but not beyond that.
Although this happens, the obligation to inform the Treasury remains in force. However, it is possible to avoid this double taxation and pay taxes twice for the same interest if it is reported in the box for deductions for double international taxation of the amounts withheld abroad.
Do you also have to present the 720 model?
Regarding accounts and deposits, only if you have more than 50,000 euros located in these products abroad, form 720 must be presented before March 31, 2021 before the Tax Agency, just before the start of the rental campaign.
The presentation of this model should be carried out only if the average balance of these products as of December 31 of the previous year or the average balance of the last quarter of the year as a whole exceeded 50,000 euros.
Unlike the income statement, this document will only need to be submitted again if the declared capital has increased by more than 20,000 euros.
What foreign deposits are worth investing in?
From HelpMyCash they confirm that currently It is possible to obtain 1% APR or more when contracting a foreign deposit through Raisin, an online savings platform that allows Spaniards to contract accounts and deposits from different European countries online and in full Spanish. Furthermore, when you first contract a savings product marketed by Raisin, it is possible to win up to 100 euros as a gift.
For example, the Czech entity J&T Banka offers its 18-month deposit at 1% APR, which can be contracted through an initial investment of 10,000 euros. This deposit is protected by the Czech Deposit Guarantee Fund (FGD), which covers the balance and interest generated by the deposit up to a maximum of 100,000 euros. If a longer term is preferred to obtain more profitability, the entity offers its 2-year deposit at 1.19% APR with the same conditions as the 18-month deposit.
The Italian Banca Progretto offers, through Raisin, its 2-year deposit at 1.11% APR, which can be contracted with an investment of at least 10,000 euros. His FGD is Italian.
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