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Modelo 720: The most notorious tax form in Spain

Many foreigners resident in Spain do not know that they are required to do that Model 720 to be submitted to the tax office if you have assets abroad of more than 50,000 euros.

Many foreign property owners residing in Spain do not know that they are legally obliged to report to the Spanish tax authorities that they have property, investments or bank accounts outside of Spain.

Failure to disclose assets overseas can be great high fines (starting in the five-digit range).

It should be noted that with the introduction of the Common Reporting Standard (CRS) in 2018, signed by over 100 countries to combat tax evasion, the Spanish Tax Office will receive tax information from other countries on foreign taxpayers residing in Spain.

Since 2013, the year this tax law was enacted, over 7,000 taxpayers have been (severely) fined.

If in doubt, please contact one of our employees who will be happy to inform you about this Inform tax liability.

Who has to submit the Modelo 720?

All taxable residents of Spainwho have assets abroad (i.e. outside Spain) worth at least € 50,000.

Warning: you must make this declaration of your assets outside of Spain do not submitif you are not based in Spain.

Who is considered to be resident in Spain for tax purposes?

The Spanish tax office uses the following criteria, among others:

  • You spend more than 183 days in a calendar year on Spanish territory.
  • Their center for financial interests is in Spain.
  • Your spouse and / or minor children live in Spain.

Report categories

There are three categories of reports: bank accounts, investments, and real estate.

Reporting requirement

You must report all assets of a certain category if the value of all of your assets exceeds € 50,000.

Deadline for the Modelo 720 2021

From January 1st to March 31st, 2021.

Can I submit the form after the deadline?

Yes, but large fines are imposed. Ask us.

If you have already submitted the Modelo 720 in the past

You only need to fill out the form again if:

  • The value of an existing asset has increased by more than € 20,000 or
  • You have sold or sold an asset
  • You have received a new asset.

Penalties for violations

The disproportionate fines are (very) high.

  • Failure to submit the Modelo 720 or incorrect information: € 5,000 Perviolation.
  • Minimum fine of € 10,000 for each group of assets.
  • 150% penalty on unpaid income tax.

Please contact us if you would like to submit the Modelo 720. Our fees are very competitive.

At LNA we can help you buy, sell or rent your property in Spain. We have 17 years of real estate transfer and tax experience.

Larraín Nesbitt Abogados, small fees, great service.

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