15 Apr, 2022 @ 10:30
1 min read

Out of order: Modelo 720 overseas assets law in Spain ‘abusive’

Modelo 720

THE 720 form is in question. This infamous and abusive Spanish tax form has been now declared contrary to the free EU movement of capital.

The EU Court of Justice ruled on 27 January 2022 that the penalties imposed are disproportionate and are not necessary to guarantee the effectiveness of the Spanish tax legal system.

On top of that, the power of the Spanish Tax Office to treat that information as an undeclared capital gain, even before the four years statute of limitation has elapsed, is abusive. Form 720 is still mandatory, and it should be prepared before the end of March 2022. However, the Spanish Government must modify the current penalties.

Modelo 720

This process is not going to take less than a few months.

Del Canto Chambers is now considering potential legal actions to be brought against the Spanish Tax Office for those affected.

Form 720 is a full declaration of absolutely all the assets held abroad by the Taxpayer, with heavy fines and penalties for lack of compliance.

Del Canto Chambers Logo

Form 720 is required to those who are tax resident in Spain when the value of any assets held abroad surpasses €50,000 including:

  •  Bank accounts.
  •  Investments: including shares, securities, insurance…
  •  Properties.

The fines imposed for not complying are:

  • €5,000 for every piece of information that is not submitted, or if it’s not accurate. €10,000 is the minimum fine paid if this omission is detected by the authorities.
  •  €100 for every piece of information on the form when it is submitted by post, rather than electronically. €1,500 is the minimum fine paid if the individual does not complete the

electronic form.

  •  €100 for every piece of information on the form when it is submitted after the deadline and before it is requested by the Tax Authorities.

But that’s not all. Any assets not listed on the form will be included in your taxable base as an

undeclared gain. In that case there was a penalty of 150% applied to the relevant unpaid tax.

Thankfully, this has now been declared illegal by the EU Court.

For more information please call Del Canto Chambers on +44 2070 430648 or Make An Online Enquiry.


Staff Reporter

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