EXPATS: Time to declare your worldwide assets if you haven’t already

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You have until the end of the month to file your worldwide asset declaration with the Spanish taxman or face swingeing fines that could make you wish you’d never heard of Spain.

Just a heads-up for expats living in Spain that the end of March is fast approaching, and with it the deadline for filing Spain’s infamous Modelo 720 ‘Information return on assets and rights held abroad’, also know as the worldwide asset declaration form.

If you live in Spain and own assets with a value of €50,000 or more per category (for example €50,000 spread over different bank accounts abroad, or a property worth €200,000) you have to complete this declaration. The fines for not doing so, or filing late, or making mistakes, are eye-watering, so best not take any chances with missing the deadline.

I won’t explain the law here as I’ve done that in previous articles (see ‘Expats are the target of a new law (Modelo 720) on worldwide asset declaration’ or follow the Modelo 720 tag below), and for those who are interested, I also provide links at the bottom to some tax advisors who have a reputation for knowing this subject. This is just to remind you that the filing deadline is approaching.

What if you have failed to declare in previous years, like the person who recently left this comment at SPI?

“I’m resident in Spain since december 2014, I didn’t know to fill in a modelo 720 form in 2015..I found out I had to do it the first 3 months in 2015 but I didn’t know a Gestor told me I’m to0 late so they can fine me with 150% is this right? even If I fill it in one year later? Their advice was not to declare but this sounds strange to me ..I have 700k in assets.”

The fines are so high they essentially discourage expats from complying. By some estimates there are thousands of expats in this situation.

This law basically treats anyone who owns assets abroad as a criminal until proven otherwise. I’m told it was intended, amongst other things, to discourage corrupt politicians from hiding their wealth abroad, but perhaps as an unintended consequence – who knows – the biggest victims are foreign expats living in Spain, many of whom have assets back home they acquired long before coming to live in Spain.

No study has yet been done on the economic impact of this law on the Spanish economy, but I suspect it impoverishes Spain by discouraging expats and foreign investment, whilst doing little to uncover the ill gotten gains of locals.

MODELO 720 RESOURCES
+ Spanish Tax Office information page (partially in English)
+ DMS Consulting (in Mallorca)
+ LexTax Consulting (in Javea)
+ Javier Salinas Ullastres (in Marbella and Madrid)
+ Esteban Raventós at Baker & McKenzie (Barcelona)

Comments

comments

8 thoughts on “EXPATS: Time to declare your worldwide assets if you haven’t already”

  1. Graham Kervin

    Hello,
    I have no assets abroad, but I sold 2 buildings in the UK to my children on an interest free mortgage which they re-pay on a monthly basis.
    Would the tax office consider this as an asset?

    Graham

    1. Peter Purvey

      I did’r think this was an expat only declaration, ilt surely applies to all Spanlsh residents. If not it is clearly discriminative and possibly illegal under European law.

  2. Gerry

    Hi Mark,
    I have a property in Spain, which I rent out long term. I live in the UK and pay non residents taxes and a Suma tax.

    Do I need to fill out an asset form?

  3. Sam

    Hey Mark thanks for your blog I find it very interesting. I’m Australian and have been living in Spain for a few years and only just heard about this model 720. I have some term deposits and a property in Australia. Does the Spanish government only want to know what we have or do they want to tax us on our wealth?! I’m happy to declare everything as all my savings have been taxed and my investment property doesn’t make a profit. Any advice would be great.

    1. Profile photo of Mark StücklinMark Stücklin Post Author

      Sam, they claim they just want to know what your assets are for information purposes, but many people are sceptical and think it’s just a first step. However, be warned, declaring late risks big fines. Seek specialist advice if you have any doubts.

      1. Profile photo of rojoybagorojoybago

        Hola chic@s,

        If you live here more than 180 days a year you are considered tax resident – punto final !!… as Mark says you need to disclose assets and income worldwide – Where Spain has a double tax treaty you won’t have to pay the tax twice (so, no problem) ; otherwise??? with increasing big brother watching; I would be very careful and get my house in order – Spain is slow, but they do get there in the end!! there is also a penalty if you declare now; ie two years late – get a top tax consultant and get sorted !

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