Model 720 and Heritage

Do you reside in Spain but have assets or assets abroad? Do you know the Model 720? In this article, we give you all the details so that you know what you must declare, how and what can happen if you do not present this model.

In 2012, the General Tax Law was modified by Law 7/2012, and the need to report on assets and rights located abroad using Form 720 was introduced. The objective of the change was to fight against fraud.

Form 720 and assets abroad: what should you declare?

You will have the obligation to present Form 720 in three different cases:

• When you have accounts in financial institutions located abroad. For example, you have an amount deposited in a bank account in Argentina.
• When you own securities, rights, insurance or income deposited, managed or obtained abroad. For example, you own several shares in a company located in Germany.
• When you own properties located abroad or rights over said properties. For example, you have a home in Paris (France).

Who must present Form 720?

You will have to submit the declaration on assets and rights abroad when:

• You have submitted it previously, and there has been an increase of 20,000 euros in one of the categories detailed in the previous section.
• You exceed the limit of 50,000 euros in any of the categories.
• The ownership of an asset or right that you have reported in a previous declaration is extinguished.

What is the deadline to submit Form 720?

The obligation to present Form 720 must be fulfilled between January 1 and March 31 of the year following the year to which the information that appears in the declaration refers.

What happens if you do not present Model 720?

One of the most important controversies that implementing Form 720 entailed was that despite being an informative declaration, quite high penalties are regulated for non-submission or submission after the deadline.

If you are obliged to present the declaration for the three obligations that we have seen and you do not do so, a penalty of 30,000 euros could be imposed, and if it is only with respect to one of the obligations, the penalty may be 10,000 euros.

Suppose you submit Form 720 voluntarily, even after the deadline. In that case, the sanctions will be lower, but if you do so because you have received a request from the Tax Agency, additional surcharges may be imposed.

What can you do to know if you should file Form 720 and do it on time?

If you have doubts about whether or not you should present Form 720, you must consult a tax expert who can tell you whether there is an obligation. In addition, it will help you avoid errors and penalties and reduce your tax burden.