Overseas Assets Tax Form (Modelo 720)
Tax form Modelo 720 has been one of the more controversial declarations in recent years owing to the use of sanctions which are often disproportionate, particularly when issued for omitting details or filling the form out incorrectly.
To be sure to avoid any financial penalties, get in contact with us and resolve any queries you might have about Modelo 720.
Who is obliged to submit a declaration?
- Any natural or legal persons who are residents in Spanish territory.
- Any permanent establishments in Spanish territory belonging to non-resident persons or entities.
- Any entity covered by Article 35.4 of the Ley General Tributaria (General Tax Law), which includes unclaimed estates, business partnerships and other entities which, despite not having legal status, constitute an economic entity or separate asset which is subject to taxation.
What are the possible penalties if I don’t submit a declaration?
If you are obliged to submit Modelo 720 and fail to do so, you could incur significant penalties. The penalty for not submitting a declaration or submitting a declaration which contains errors or omissions is €5,000 per item or group of items, and the penalty for submission after the deadline is €100 per item, with a minimum of €10,000 and €1,500 respectively.
Furthermore, there is often no time limit on when these infractions can be penalised. On the other hand, the treasury may consider your overseas assets to be undeclared capital gains and apply an increase to your income or corporation tax bill and a penalty of 150% on the amount due.