Foreign Assets (Modelo 720)

Modelo 720 is an informative declaration required for residents in Spain to disclose foreign assets exceeding certain thresholds by March 31st, with significant penalties for non-compliance; it involves detailed reporting on bank accounts, properties, and investments, and fees for assistance with filing vary depending on the complexity of the declaration.

Introduction

If you’re a resident in Spain with foreign assets, understanding Modelo 720 is crucial. This declaration, due by March 31st, requires you to report foreign assets exceeding certain thresholds. While it’s informative in nature, failure to declare can result in severe fines. Here’s what you need to know about this obligation, including who needs to declare, what information is required, and the potential fines for non-compliance. Additionally, we’ll outline the filing process and offer guidance to ensure compliance with Spanish tax regulations.


What is modelo 720?

If you are resident in Spain, you will have to declare your foreign assets before March, 31th in case the value of these assets exceeds certain minimum amounts. The declaration 720 has an informative character, no taxes have to be paid.

Nevertheless, not declaring when obliged to do so is considered as fraud by the Spanish Tax Authorities and hefty fines can be imposed. There is no period of prescription for this declaration, meaning that these fines will remain applicable in the future.

Even though this declaration does not lead to the payment of taxes, the Tax Authorities may use the information for further inspections. If any inaccurateness in previous tax returns is corrected on your own initiative, potential fines may be reduced.

Am I obliged to declare?

A declaration needs to be submitted if you own or control assets outside of Spain in one or more of the below categories and their value exceeds 50.000 euro.

  • Bank Accounts and Deposits, including Crypto Currencies
  • Property and Property Rights on Real Estate
  • Pension Funds and other Financial Rights
  • Shares, Stocks, Bonds, Values
  • Insurances

The determination moment of value is the balance on the 31st of December and the average value over the last quarter.There is no need to submit the declaration, if:

  • The value of your total assets abroad exceeds 50.000 euro, but in none of the mentioned categories separately (bank, real estate, rights) the value exceeds 50.000 euro.
  • None of the categories show value changes of more than 20.000 euro in comparison to the last declaration.
  • The (‘Beckham’) expat scheme is applicable, and you are considered non-resident for tax purposes.

A declaration must be submitted in the following cases (amongst others):

  • If you have submitted a 720 form in previous years and the value in one of the categories has increased with more than 20.000 euro in comparison to the last declaration.
  • If your share is less than 50.000 euro, but the total value of the asset abroad is more. Example: a joint bank account with a total balance of 60.000 euro, both parties need to present a declaration, even though your ‘own’ share is < 50.000 euro.
  • If you have been empowered or authorized, if you enjoy the usufruct or if you own properties abroad in any other way (beneficiary, representative, etc.). Example: you are empowered on a foreign bank account in your parents name with a balance of 60.000 euro.
  • If you have properties of which the purchase price exceeds 50.000 euro (also if the purchase price -/- mortgage value is less than 50.000 euro).
  • If you have sold your property abroad last year, you closed your bank account; your power of attorney has been cancelled, etc.
  • If you have a participation in a holding company with assets abroad, these assets will need to be declared as well.

The overall purpose of this declaration is get visibility on capital held outside of Spain, registered in your own name or registered to others, and which might not be declared in Spain. The above mentioned examples are therefore limited and in case of doubt we advise you to contact us.


What information must I provide?

1. For all types of bank accounts, deposit accounts, etc., amongst others:

  • Details bank: Name, address and tax number.
  • Account number, IBAN, BIC.
  • Date opening (day, month, year) account or obtaining authorization.
  • Balance 31st December and average balance last quarter.
  • Bank accounts without or with negative balance also need to be declared.

2. For property, rights, usufruct, time-sharing, shared property, etc., amongst others:

  • Specification: urban or rustic
  • Address: country, city, street, number
  • Acquisition date (day, month, year)
  • Acquisition price (including taxes)

3. For shares, bonds, participations in investments funds, etc. amongst others:

  • Name and address of the company, person, entity, etc. to which the rights relate.
  • Value per 31st December, divided per right / share / etc. (value and number).

What are the fines if I do not present?

Penalties can be significant. The penalty for not filling can be €5,000 per datum (minimum of €10,000). The penalty for late, filing an incomplete form or filing with inaccurate data is €100 per datum (minimum of €1,500). The penalty for undeclared assets can be up to 150% of the value of the assets.

The penalties are so steep that the EU has initiated proceedings against Spain, deeming that the fines are excessive and that impede the free movement of persons and capital, which is a one of the fundamental principles of the European Union. However, for the time being, the issue remains unresolved.

How do I file my declaration?

The required information per asset is extensive and obligatory by the Spanish tax authorities so check if you have all required information to gather any missing items on time. The requested information typically needs to be provided in February in order to prepare and file the declaration before the deadline on March 31st, so contact us on time!

It is also important that you have a contact address in Spain. The Spanish Tax Authorities often check the validity of the data in the tax declaration and failure to provide a timely reply may lead to an unilateral interpretation of facts accompanied by fines and sanctions. We can offer you the possibility to use our address and contact details in case of need.

Fees and Conditions

Included: Supplying information about the required data, organize the information, preparing the declaration based on this information, and submitting the declaration.

Not included: Additional activities or services due to tax inspections or following requests for additional studies or information. Third party costs (courier services, the cadastral service, sworn translations) will be reinvoiced. Fees exclude VAT.

Method of delivery: All necessary information needs to filled out in the provided spreadsheets. You will see that the required information per asset is extensive. All this information is required by the Spanish tax authorities and needs to be filled in. This allows us to work efficiently, save time and apply fixed fees. In case the information is not provided through the spreadsheets, and we are obliged to fill them out based on other documentation, and we will have to charge the additional work per hour.

Deadline: Please provide us with the requested information before the end of February. The tax declaration needs to be filed not later than March 31th.


1. Study, No Declaration €95

  • If in doubt, we recommend you to provide us with relevant information and documents.
  • If a declaration needs to be filed, our normal fees will be applicable.
  • If no declaration needs to be filed, our study fee will be charged.

2. Basic Declaration €155

  • Fees only applicable in case information has been provided through our spreadsheets.
  • Fees applicable up to 3 bank accounts / real estate / shares.
  • For each additional bank accounts / real estate / shares 45 euro is charged.
  • If you have more than ten items, a reducing scale will apply.

3. Special Declaration €125 / Hour

  • Information provided without spreadsheet or after end of February
  • In case underlying documents need to be requested and studied
  • Amounts not provided in Euros or accordingly converted
  • Any other special aspect not mentioned herein.

Liability: We will prepare your tax declaration based on the information you have provided us with. You are therefore responsible for providing us with correct and complete information. We do not accept any liability due to inaccurate, unclear and incomplete information.​

Responsibility: If we prepare your tax declaration, this does NOT imply that we will notify or prepare any other possible tax declarations (such as for example the property tax IBI). We will do our best to inform you, but we may not have all the background information required. You are therefor responsible for your tax fillings and payments unless you have specifically contracted our services for each.

Tax correspondence address in Spain: It is of importance that you have a correspondence address in Spain. The Spanish Tax Authorities may proceed to check of the validity of the data of the tax return and failure to provide a timely reply may lead to a unilateral correction of the declaration accompanied with fines or sanctions. We offer the possibility to use our address as a correspondence address in case of need. For more information, please contact us.


Sign me up!

By submitting this form you will be placed on the list of applicants in chronological order. Our capacities are limited and inscription is no guarantee for admission. We will confirm admission of your request before the process starts.

Once you have confirmed acceptance of fees and conditions, and we have received your payment, we will process your declaration.

General service conditions apply, such as payment terms and limitation of liability to the amount covered by our insurance policy.

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The information contained herein is of a general nature, and subject to changes. Applicability to your specific situation should be determined through consultation with our tax or legal advisors.