As a gentle reminder, we explained in detail what this tax form is in a previous article: Modelo 720 – Tax form 720 – 20th January 2021
Basically, if you are tax resident in Spain and hold over 50,000 euros abroad in either real estate, bank savings or investments you are under a legal obligation to file tax form 720 for reporting purposes only (no tax is paid).
This tax form is hugely unpopular with foreign residents in Spain who are forced to disclose assets and rights held abroad under threat of humongous penalties on non-compliance. It is single-handedly responsible of thousands of expats leaving Spain in order not to comply with it.
The fines levied were so disproportionate that it was challenged at Brussels. The final ruling came out last week.
The European Court of Justice delivered a key ruling on the 27th of January 2022 which declares several aspects of Spain’s tax form 720 illegal.
The following, have been declared null and void:
- The no imprescriptibly of the debt.
- The disproportionate fines of 150%.
- The disproportionate fines on not disclosing all the financial data or doing it wrong.
This means that taxpayers who were (heavily) fined by the Spanish Tax Office in previous years may now file a tax rebate through our law firm and claim back (large) fines plus legal interest on top. It is estimated the tax office levied over 230 million euros in fines though tax form 720 since 2012.
Going forward, tax form 720 will now have much more moderate penalties on non-compliance, in line with other taxes in Spain.
If you have been a victim of tax form 720 in the past, and have paid a large fine to the tax office, please contact us urgently so we can assist you recovering your money, plus legal interest on top.
Related articles on idealista:
- Modelo 720 – Tax form 720 – 20th January 2021
Squatter in Palma fined for rooftop pool that put building at risk
A court in Palma has convicted a woman of two offences: illegally occupying a property and installing a 6,000-litre pool on the flat’s terrace, which caused structural damage to the building and put other residents at risk. As a result, the judge ordered the squatter to pay €8,000 in compensation, although the owner estimates the damage to be “in the tens of thousands of euros.”
8 reasons to apply for a Digital Nomad Visa in Spain
If you are planning to move to Spain, you should seriously consider becoming a digital nomad.
Changing from NIE to DNI in Spain: everything you need to know
If you’re a foreign national in Spain with a Foreigner Identification Number (NIE by its Spanish acronym) and have recently acquired Spanish citizenship, you may be wondering how to change your NIE to a National Identity Document (or DNI) to update and regularise your administrative status. In this article, we explain all the steps you need to follow.
Beckham Law in Spain: a complete guide for expats and remote workers
If you’re considering moving to Spain for work, you may have come across the term “Beckham Law”. Officially known as the Special Expatriate Tax Regime, this tax scheme allows foreign workers to benefit from a significantly reduced tax rate on their income in Spain. It’s a popular option among professionals, entrepreneurs and high-net-worth individuals relocating to the country.
Spanish court rules against the fiscal tax discrimination of non-resident taxpayers
Lately, there has been a lot of talk and hype in the media regarding a Spanish ruling that opens the way to end tax discrimination against non-residents on filing the annual Non-Resident Imputed Income Tax (NRIIT).
Garage squatting in Spain: legal risks and how to reclaim your space
Illegal squatting is no longer limited to homes: private garages have become a new target. An increasing number of owners in major cities are reporting intrusions into their parking spaces, leading to both legal and financial disputes. Although the law provides for penalties and eviction procedures, these processes are often protracted, leaving those affected to resort to temporary solutions.
