Form 720: Everything you need to know about the Declaration of Assets Abroad

The assets and rights declaration abroad, known as Modelo 720, is a tax obligation that raises many questions among Spanish taxpayers. In this comprehensive guide, we explain everything you need to know about this important informative declaration.

What is the Modelo 720?

The Modelo 720 is an informative declaration of assets and rights located abroad that tax residents in Spain are required to submit to the Spanish Tax Agency (AEAT). This form allows the Tax Agency to know the wealth that taxpayers hold outside Spanish territory.

Introduced in 2012 as part of anti-tax fraud measures, this is an informative declaration (it does not involve paying taxes), but its submission is mandatory when specific requirements are met.

Who Must Submit the Modelo 720?

The obligation to submit applies to:

  • Individuals and legal entities residing in Spain under specific circumstances.
  • Permanent establishments in Spain of non-residents.
  • Undivided inheritances and property communities.

What Assets Must Be Declared?

  1. Bank Accounts Abroad
    • Current and savings accounts.
    • Deposits.
    • Securities accounts.
  2. Securities, Rights, Insurance, and Income
    • Shares and stakes in companies.
    • Investment funds.
    • Life insurance policies.
    • Bonds and obligations.
  3. Real Estate
    • Houses and commercial properties.
    • Land.
    • Real rights over real estate.

Thresholds and Obligation to Declare

The obligation to submit the Modelo 720 arises when:

  • The value of assets in any category exceeds €50,000.
  • There is an increase of more than €20,000 compared to the previous declaration.
  • Previously declared assets are sold or extinguished.

Deadlines and Submission Method

Consequences of Non-Compliance

Failing to submit the Modelo 720 may result in:

  • Administrative Penalties: A fine of €200 for non-submission or €100 per incorrect or late-reported data, plus possible surcharges and interest.
  • Imputation of Unjustified Capital Gains.
  • Potential Tax Audits.
  • Requests for Additional Information.

Practical Recommendations

  1. Collect all necessary documentation in advance.
  2. Keep an updated record of your assets abroad.
  3. Retain evidence of origin and ownership.
  4. Consult with a tax advisor if you have doubts.
  5. Verify asset values according to established regulations.

Key Takeaways

The Modelo 720 remains an essential tax obligation for fiscal residents in Spain with assets abroad. Although sanctions have been softened following the ECJ ruling, compliance is critical to avoid issues with the Tax Agency.

The key lies in maintaining proper control of foreign assets and seeking professional advice when necessary. Proper planning and submission of this informative declaration will prevent future issues with tax authorities.


Frequently Asked Questions (FAQ)

Do I need to submit the Modelo 720 every year?
No, it is not necessary to submit it annually. Only if:

  • The thresholds are exceeded for the first time.
  • The value of the assets increases by more than €20,000.
  • Previously declared assets are sold or extinguished.

How is the €50,000 threshold calculated?
The threshold applies independently to each asset group (accounts, securities, and real estate). If any group exceeds this limit, you must declare it.

What if I have assets in multiple countries?
You must declare all assets that exceed the thresholds, regardless of the country in which they are located. The declaration is combined for all countries.

Do I need to declare if I am just an authorized user on an account?
Yes, authorized users of bank accounts must declare them, even if they are not the account holders.

How do I declare assets in other currencies?
You must use the official exchange rate as of December 31 of the declaration year.

Can I submit a supplementary declaration?
Yes, it is possible to submit supplementary declarations to add omitted information or correct errors.

What happens if I inherit assets abroad?
You must declare them in the Modelo 720 for the following year if they exceed the established thresholds.

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