Updated information Model Declaration 720
Despite Spain has been required by the EU to adopt measures to correct the disproportionate sanction regime of the 720 form, up to this date Spanish Authorities have not modified any aspect of the 720 form. Therefore, by 31st March the personal income tax payers (IRPF in Spanish) or corporate tax payers must inform about their assets or rights held abroad. There are three groups of assets that must be declared:
- Funds in accounts in financial institutions abroad.
- Securities, rights, insurance and income deposited, managed or earned abroad.
- Real estate and rights over real estate located abroad.
The obligation to report exists if the total joint value of the group exceeds 50,000 euro.
However, if the 720 form has been filed in previous years, it may not be necessary to file it again in relation to any of the three groups of assets, or may have to be filed partially.
There is no obligation to file the form except:
- When in relation to any of the three groups of assets, there is an increase of 20,000 euro compared with what was declared in the last Model 720 filed.
- When the declared assets do no longer meet the requirements that makes the person or entity report their assets.
As mentioned previously, although it is a mere informative declaration, if it is not filed within the deadline, or is filed with inaccurate or incomplete information, these are considered serious infringements and the penalties can be a fine of 5000€ per item or group of items related to a group of goods, with a minimum of 10000€ for each group of assets when the 720 form has not been filed at all or has been filed with incomplete or inaccurate information.
Regardless of the fines for failing to file the 720 form, the Administration can attribute as unjustified patrimonial gain the value of the goods abroad in the IRPF of the last year, unless it can be clearly demonstrated that the goods abroad correspond to income declared or obtained when one was not resident in Spain.
The above would be considered as a very serious infringement and would the fined with an sanction of 150% on the resulting IRPF quota or Corporate tax.
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