The Modelo 720 (tax form number 720) was approved on October 29th 2012 as one method to counteract fraud.
In the current tax year, all obligated taxpayers must present the informative declaration for the previous year by completing the Modelo 720.
This is a declaration of goods and assets located abroad in the following specific categories:
- Bank accounts with financial institutions
- Securities, rights, insurance and income deposited, managed or obtained abroad
- Real estate located abroad.
While the law splits the items to be reported into the above three different general groups, there are peculiarities and exceptions within each group.
Who is required to present the Modelo 720?
Those individuals and legal entities that are resident in a Spanish territory, permanent establishments, and entities referred to in Article 35.4 of Law 58/2003.
The asset holder, their representative, an authorized person, beneficiary, a person or entity with powers of actual disposition is obliged to report on all the three categories above.
There is no obligation to report any items for which the total sum within a category does not exceed 50,000 Euros. However, if any group total exceeds this amount there is a legal obligation to report all the assets that make up that sum.
With reference to a bank accounts or bank accounts with financial institutions, if the final combined balance is 50,000 Euros or more there is an obligation to declare. When there are multiple accounts they should be declared when the total adds up to over 50,000 Euros. If the total is less than 50,000 Euros it is important to check the average balance as, if this exceeds the limit, a declaration still has to be made.
In subsequent years, taxpayers will only have to submit a Modelo 720 to report on any group in which there has been an increase of more than 20,000 Euros since the last statement was presented.
When to submit the modelo 720?
The declaration on goods and rights located abroad must be submitted between January 1 and March 31 of the year following that to which the information presented in the Modelo 720 refers.
Those who, for technical reasons, cannot present the Modelo 720 over the Internet within the established time limit, may make the presentation within three calendar days following the end of that period.
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