The “Modelo 720” form is the declaration of overseas assets that the tax office requires  Spanish fiscal residents who hold assets outside of Spain above a certain value to complete. 

No tax will be levied on these assets, but the intention of the Tax Office is to use this information in comparison against income tax returns, to ensure that income generated from these assets is being reported, which is typically not reported,  for example, the rental income. 

Failure to submit the model 720 before the deadline could have negative consequences, which many people are unaware of.

Apart from the penalty for presentation after the deadline which corresponds to a minimum fine of  1500 euros, the late presentation could also lead to the classification of assets as unjustified capital gains for their total amount. Thus leading to an unwanted tax bill.

This capital gain may involve an income tax settlement for that profit of more than 20% of the total value of the undeclared asset, which for a simple property in the UK, for example, would mean a few thousand euros.

Rental income, interests from banks, dividends from shares, etc. are taxable in Spain for Spanish residents and the Spanish authorities don’t want you to forget it when you pay your tax bill in Spain. 

If you want to know if you are liable to complete the model 720 get our free resource here.

If you want us to check it out on your behalf or you need our help to complete the Model 720, just fill out the form next to this text.