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SPAIN'S MODELO 720 EXPLAINED following EU Court ruling | BayRadio & Blacktower Financial Management
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Oct 29, 2024
The MODELO 720, a declaration of overseas assets for those resident in Spain, has been declared 'incompatible with EU law' in a number of areas by the European Court of Justice. The new ruling means that anyone that had previously received a hefty fine for not submitting the form may be able to claim that money back. BayRadio regular contributor Christina Brady from Blacktower Financial Management clarifies whether you still need to complete the declaration and who it applies to. Be sure to Like and Subscribe to our YouTube channel for more insights from BayRadio Spain, and follow us on Social Media: Website: http://www.bayradio.fm/ Facebook: https://www.facebook.com/BayRadioInSpain Instagram: https://www.instagram.com/bayradiospain/
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we specialize in protecting preserving
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and growing your wealth black tower
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financial management the team you want
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by your side visit
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blacktowerfm.com let's get on to the
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modelo 720 then in spain this is
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something we've become used to it's been
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challenged before in taking to the the
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eu and ec and it has a game what
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happened
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right okay um a few years ago the eu
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made a ruling that the fines were
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disproportionate to the crime however
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spain chose to ignore that ruling he
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went to the supreme court in the eu and
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they have made a ruling and that came
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out on the 28th of january 2022
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and it declared null and void certain
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sections of the model of 720 but agreed
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that doing the modelo 720 was still a
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legal requirement in spain
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it hasn't been abolished and it affects
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any tax resident in spain that has
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overseas assets worth over 50 000 euros
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in certain three classes so it still
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remains enforced you still have to do it
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the bits they've said and that are null
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and void is the disproportionate fines
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of up to 150
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and fines for not disclosing all
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financial data or doing it wrong
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so this still has to be done by the 31st
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of march each year you do it once and
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then you need to do it every single year
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unless
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you sell off one thing completely or the
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value of something goes up more than 20
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000 euros during a year so once you've
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done the modelo 720 you don't need to
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redo it every year you only do it if
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those two things apply
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so spain so far since inception in 2012
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for the modelo 720 have taken over
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230 million euros in fines
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these fines if they are in relation to
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what the eu is ruled a null and void can
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now be claimed back so you can claim a
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rebate for the fines and you can get
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your legal costs on top so if any of you
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were fined and the fines were very very
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hefty at the beginning you need to go
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and see your accountant and ask them to
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set up the procedure to get that money
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back for you the fines are not
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legal but the modelo 720 is so there's
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been loads of rumors all the 720 has
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been abolished no the eu has confirmed
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the 720 is legal it needs to be done by
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anyone who is a tax resident in spain
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who holds overseas assets so no matter
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what you hear down the pub what your
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friends tell you what the gossip is you
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have to do it if you don't do it you can
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still be fined but the fines will be
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less onerous they won't be so high i
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think the average fine is about 150
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euros for doing things incorrectly on a
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tax return i'm not sure but there'll be
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a lot less but you'll still be fined and
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if you do
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not do it and you get caught out
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obviously then the tax office may think
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oh what else are you hiding and they may
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then do afford it and it may become a
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nightmare so if you have got assets
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overseas
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that's bank accounts if you've got four
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bank accounts they all hold say 15 000
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or yet you have to report all of them
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it's if the total of all your bank
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accounts and deposit accounts come to
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over 50 000 euros as at the 31st of
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december 2021 using the exchange rate of
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that day then every single one needs to
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be reported again if you have a joint
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bank account for 50 000 euros or more
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in pounds or equivalent you need to
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report it not just say well you've only
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got half of it so it's 25 they say no
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you have access to the 450 you don't get
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taxed on it
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but what it does mean if they want to
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they can check if you say you have got a
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deposit account that if you have been an
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interest at the moment you won't be but
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when people were they were declaring the
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interest they were getting on their
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deposit accounts etc it's not for tax
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purposes it's an audit
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purpose to make sure they know what you
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have
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you know
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all across the world outside spain
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however if you do an investment with a
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financial advisor in spain and you do
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something that's called as an investment
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that's tax compliant in spain
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even though they're usually held in
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luxembourg or dublin they do not need
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reporting on a modelo 720
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because these companies report them for
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you so that's why so many people are
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quite keen on doing investments in one
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of these what we call products because
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it means you don't have to worry about
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the modelo 720 you're never ever going
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to have a problem with it also if you
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take money out if if there's tax due
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they pay the tax on your behalf and also
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if you do one of these products as it's
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held outside spain if you dine your
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beneficiaries live outside spain they're
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not subject to spanish inheritance tax
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which is another thing that's quite
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onerous and quite high in spain
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but please if you have thought oh i
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don't need to do the modelo 720 and you
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have assets
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over 50 000 euros please please talk to
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your accountant because yes you do need
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to do it and by the 31st of march i
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don't need to do the model of 720. i can
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tell you that which now so we're talking
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over 50 000 assets abroad but yes it
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will apply to people maybe for the first
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time if they haven't done one before so
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that's the 31st of march
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it is you've got three categories the
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first category covers your bank accounts
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like deposit accounts current accounts
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the next category covers a multitude of
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things like pensions investments so
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usually people do have something in the
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second category that comes up to over 50
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000 if you add them together so they
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have to report and the third um
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section is property overseas so so just
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you know talk to your accountant on
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historia just make sure that they
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understand what assets you have and they
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can tell you where they should be
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reported or not and then it's up to you
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you know obviously you may decide no i'm
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not going to report it but by law you
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should listening and exceeding
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expectations for over 31 years black
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tower financial management the team you
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want by your side visit blacktowerfm.com
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