The Modelo 720 form in Spain 2020

What is the Modelo 720 and how does it affect me? / Gtres
What is the Modelo 720 and how does it affect me? / Gtres
9 March 2020, Redaction

The “Modelo 720” form, is a basically a declaration of overseas assets, that is to say, assets held outside of Spain. Spanish tax residents are obliged to fill out this 720 Form and make the tax authorities (the “Hacienda”) aware of their fiscal activity in other countries. Let’s break down this process which can seem complicated but is, in fact, fairly simple.

Do I need a Modelo 720 form?

All physical or legal persons resident in Spain who own assets outside of the country with a total value of more than 50,000 euros on 31st December must submit Form 720. This includes the following assets:

  • bank accounts in financial entities abroad
  • balances, incomes, insurance and taxes deposited, managed or obtained abroad
  • real estate and any profits coming from real estate outside of Spain

Fiscal residents in Spain are also obliged to declare any representatives, beneficiaries or people who have power of attorney over those assets. If the sum total of any of the three groups mentioned before does not exceed 50,000 euros, you don’t have to declare these overseas assets.

When and how to submit the Modelo 720

This declaration of your overseas assets must be submitted via the Modelo 720 form. This form is only available online, so you can only file the Form 720 electronically and not in person. It must be submitted between 1st January and 31st March of the year following that for which the information must be reported. This means that your declaration of assets held outside of Spain in the year 2019 must be filed before the Modelo 720 deadline of 31st March 2020.

What happens if I don’t file the Modelo 720 form?

This form can be tricky to fill in, especially if Spanish isn’t your native language so make sure you give yourself lots of time to meet the deadline. If you miss the deadline however, the fines are costly. Although the declaration of overseas assets is merely informative and not a tax collection, the Modelo 720 penalties for 2020 that may handed out if you fail to submit the form, for late submission, or submission of false information can be very serious for all those who are obliged to declare. The authorities can fine you anywhere between 100 and 10,000 euros for failure to meet the requirements.

However, it should be pointed out that as of 2019, the European Union considered Spain to be breaking EU law with these sanctions for people who file the Modelo 720 late. While these penalties still apply at the moment in 2020, the European Commission is currently in the process of bringing legal proceedings against the Spanish Hacienda Tax authorities against the illegality of such fines.

Ready to find the house of your dreams?

Ready to find the house of your dreams?

Find houses for sale and long term rentals on idealista