What is Model 720?
Modelo 720 is an annual report that was approved on October 29, 2012 as a modification of the tax and budgetary regulations and adaptation of the financial regulations for the intensification of actions in the prevention and fight against fraud.

It is an informative report on assets and rights located abroad. Modelo 720 is divided into three different groups of assets.

1. Report on accounts in financial entities located abroad.
2. Report on securities, rights, insurances, and income deposited, managed or obtained abroad.
3. Report on real estate and rights over real estate located abroad.

Deadline to file Modelo 720
The 720 is filed from January 1 to March 31 of each year, with respect to assets as of December 31 of the previous year. It must be submitted electronically at the Spanish Tax Agency. It cannot be file on paper.

Who is required to file Modelo 720?
Those natural and legal persons residing in Spanish territory are obliged to present Modelo 720, according to article 35.4 of the Law 58/2003.
Not only owners, but representative, authorized, beneficiary, persons, or entities with powers of disposal or real owner, will have the obligation to inform about the accounts in financial entities located abroad, securities, rights, insurance and income deposited, managed or obtained in abroad and real estate and rights to real estate located abroad.
There will be no obligation to report any asset of those groups in which the sum of the value of the assets that comprise it does not exceed €50,000. In groups where the sum exceeds this amount, there is an obligation to report all the assets that comprise it. Regarding the group of accounts in financial institutions, it will suffice for it to exceed it either the sum of the balances at December 31 of the corresponding year or the average balances of the last term of the year.

When do you have to resubmit the Model 720?
Once this form is filed for the first time, you will never have to submit it again unless the value of the property or the right has not increased by €20,000.
Modelo 720 must be re-submitted, either if any of the assets declared in the last 720 are cancelled or if there is an increase in the joint limit established for each block of information greater than €20,000 with respect to the one previously filed.

Penalties on Modelo 720
Not submitting Modelo 720 or submitting it incompletely, incorrectly or with false information is considered a tax offense. And, therefore, it will be accompanied by a monetary fine that the offender must assume before the Tax Agency.
Fines of at least € 1,500 for submitting it after the deadline, and € 10,000 for not submitting it.
If you do not file the 720, the fine is set at € 5,000 for each piece of data that should have been included in the return, with a minimum of € 10,000.
In the case of submitting the declaration after the deadline, without prior requirement from the Spanish Tax Agency, the penalty will be €100 for each piece of information, with a minimum of €1,500.
Undeclared assets, the ownership of which cannot be proven from declared income or assets, will be considered taxable income with a 150% penalty on their value. Penalty for not completing, or completing incompletely, or filing with inaccurate data, will be sanctioned at €100 per piece of data with a minimum of €10,000.

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Antonio Rodriguez

US Tax Consultants