Spring is in the air and with it a reminder for the 31st March deadline of Modelo 720 for any tax residents in Spain who have assets outside the country.
Our Spanish tax expert Antonio Rodriguez explains it all.
What is Modelo 720?
It is a Spanish tax declaration that must be made yearly for all Spanish tax residents ( Spaniards and foreigners) who have assets of €50,000 abroad.
The declaration has three sections being:
- Accounts in financial institutions abroad, which includes current accounts, savings accounts,deposit or credit accounts.
- Stocks, bonds, life insurance, pensions, trust funds, savings accounts, securities or holdings in any type of legal entity.
- Any type of real estate ownership, participation, rights, enjoyment or equity stake including timeshares.
Do I have to file this every year?
Form 720 must be filed if any of these sections exceeds €50,000 for the corresponding section(s) for the first year and then again the value has increased by €20,000 over the previous year or should any of the assets had been liquidated the previous year.
What are the penalties?
- For any assets not declared, but is considered by the Spanish tax agency to be owned a penalty of 150% of the value is applied.
- For non, incomplete or incorrect filing penalties range from 100 to 10,000 Euros.
Can the Spanish Tax Agency find my assets outside the country?
Yes, the Tax Agency have all the tolls and reciprocal tax sharing information with other countries though FATCA which has been in operation since 2013.
In addition the Spanish Tax Agency can request any information on Spaniards or foreign residents in Spain from any country or international instituttion.
For citizens of fellow EU countries the Tax Agency provides shared tax information through the Modelo 299.
The exchange of information has been automatic since 2017, and the Government aims to deepen in the coming years in this type of agreements for the exchange of information, both to improve the collection of taxes, and to enhance the fight against tax fraud.