Modelo 720 - last update 16-01-2022

Modelo 720 - last update 16-01-2022

You live in Spain? Think about the wealth tax or the modelo 720!

If you are resident in Spain then you as an expat or foreigner who is resident in Spain are obliged to declare any capital outside of Spain that exceeds 50.000,00 euro. This is done in Spain through the 'modelo 720' - Declaración informativa sobre bienes y drecechos situados en el extranjero - or tax form 720. This form must be handed in before March 31st and serves in principle as information for the Spanish tax authorities.

What is the model 720?

'Modelo 720' can be described as tax form 720 which is an annual obligation under conditions. It is a declaration that must be completed if you have foreign assets that exceed 50.000,00 euros in following 3 categories:

1st category: bank and traditional savings accounts - all cash accounts that you can access immediately when needed

2nd category: holdings - shares, funds, bonds, life insurance policies, pension funds and temporary interest rates

3rd category: immovable property: property or rights to immovable property (in possession, by purchase, inheritance or gift)

If the stated amount of EUR 50,000 is not exceeded (for each category separately), one is exempted from the obligation to provide information about affairs and rights abroad.

After the first declaration, one only has to submit the modelo 720 in the following years if the balance in one of the categories has changed by a value of 20,000 Euros compared to the previous declared values in the declaration(s) already made. Some examples why your situation may have changed:

  • You have sold or bought a property abroad
  • Your investments have matured or been sold
  • You have a life insurance payment
  • You have opened or closed a bank account
  • In one of the categories, the value has risen above EUR 50,000.00

Why the 720 model?

This declaration is an amendment to the tax code as part of the regulations aimed at prosecuting fraudulent activities in Spain. Since 1 January 2013 it is compulsory to provide information about the assets and rights that a person has abroad.

Who should submit this statement? 

All (natural) persons resident in Spain and staying longer than 183 days as well as foreign companies and commercial establishments have to fill in the form. The condition is, however, that the amounts involved in each category are in excess of 50,000 Euros.

If you have never submitted a Form 720, but you know that you have assets in one of the above-mentioned groups where the minimum amount has been exceeded, it is extremely important that you still declare it. The penalties for failure to do so can be up to €10,000 or more.

Suppose you are the heir of someone who has declared the model 720 in the past, then you have a duty as an heir to inform yourself and share information about the extinction of this or these asset classes.


When to submit?

The declaration must be made between 1 January and 31 March. It is important that the form is filled in correctly and on time because incomplete or late returns can result in very high fines.

source - https://www.agenciatributaria.es/AEAT.internet/Modelos_formularios/modelo_720.shtm

Tax return?

This model does not involve paying tax. However, if the total capital (domestic + foreign) exceeds a certain limit (we will take EUR 700,000.00 as the basic criteria), annual wealth tax will have to be paid. If this is the case for you, please contact us for more information.

Penalties and fines?

Although the Model 720 is intended purely as information, failure to do so can result in a heavy fine, ranging from EUR 10,000 to 150% of the undeclared value of the foreign asset. If the declaration is submitted too late (after 31 March) or not correctly and completely filled in, then this can also be fined with 1.500 euros or more. It is therefore important for Spanish residents with assets in another country to comply with Modelo 720.

There has been a lot of discussion about these declarations but they now appear to be off the table (anno 2022). The only thing that was not correct according to the EU was the amount of the fines for not declaring or declaring incorrectly but these are now in line with what the EU prescribes. Where previously the fine could be up to 150% of the undeclared value, this may now be no more than 50% and the formal or usual fines circulate around EUR 150 to EUR 250 per undeclared asset. Crimes against this tax declaration will also expire after four years, although we would take this with a grain of salt.

How to submit?

Do you want to know if you are eligible for this declaration? Segurantis helps you with this. You can freely use our "Declaration checker" via the button below:


If you have come to the conclusion that you are eligible for this declaration or that a change needs to be made to a previous declaration or declarations, please contact us. We will then inform you of our rates for completing this tax obligation. For your information: 15 March is the last day on which you can come to us with your information. Requests made after that date will not be processed.

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