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)