MODELO 720

All those tax residents in Spain, (i.e.:-those living in Spain for more than 183 days a year or when Spain is the main base for your business), should be aware that as a result of legislation passed on 29th October, 2012 for the prevention and control fraud, all natural or legal persons resident in Spain who have any assets outside of Spain with a value of €50,000 or more, are required to submit this declaration form to the Spanish authorities.

This declaration can be made on line, through the Tax Office`s web page www.agenciatributaria.es 
where the Modelo 720 (Statement of Assets Outside Spain) can be located and completed. It must be filed between January 1 and March 31, of the first year of residence, to avoid being investigated or fined by the Spanish authorities.

The assets outside of Spain that are subject to this new declaration form fall into 3 categories:

1. Real Estate.
2. All types of accounts, investments, bank deposits and companies.
3. Actions, rent, insurance, bonds or dividends acquired or managed outside Spain.

To warrant a declaration the total value of assets should be €50,000 or more in EACH OR ANY ONE of the categories; e.g. if we have 2 properties valued at €30,000 although the value individually would be below the threshold the total value of both would be €60,000 thus exceeding this limit, and therefore subject to this new declaration, necessitating the completion and filing of Modelo 720. However, if you have a property valued at €30,000 and say, shares valued at €30,000 as they are in separate categories and each total value does not exceed the €50,000 then you would not be required to make a declaration.

A declaration must be submitted individually by the owner/s, regardless of their number and the percentage of participation, which would be established later. For example, if you own half of a property with a value of €50,000, although your particular €25,000 share is below the threshold, each owner would still be required to submit an individual declaration based on the total value of the property.

Although this declaration of assets and rights abroad is solely informative and NO TAX is charged, failure to file, late filing or false information could result in serious consequences.

For this reason, we recommend that residents fulfill their obligation to declare their assets, to avoid the imposition of fines from a minimum of € 10,000 to a maximum of 150% of the value of those undeclared assets located outside Spain. 

Once you have made your first declaration it is not necessary to present any further declarations in subsequent years, unless any of your assets in any category increases by more than €20,000 above the initial value declared.

Please do not hesitate to contact us so we can guide you through this process. We will inform you exactly what the requirements for the completion and submission of the Model 720 are.

Jose Manuel Garzon
Senior Partner – Axarquía Solicitors

www.axarquiaolicitors.com
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