Tax residents in Spain must make an informative declaration of their assets outside the country using Form 720. It must be filed if you are a tax resident in Spain, that is to say, if you have resided for more than 183 consecutive days during a calendar year.
All those who have in their possession at least 50,000 euros in any of these three blocks of assets for which this informative declaration is focused must present this informative model:
– Accounts in financial entities located abroad.
– Securities, rights, insurance and income deposited, managed or obtained abroad.
– Real estate and rights over real estate located abroad.
It does not matter if there are more holders of such accounts or assets: the balance as of December 31 must be reported, without limiting the percentage of ownership of the declarant.
The fines are high. In case of receiving a requirement from the Administration, the fines will amount to 5,000 euros per undeclared data, with a minimum of 10,000 euros. In addition, failure to file will be penalized with a fine of 150% of the full amount.
Recently, the European Court of Justice has ruled on this penalty system. The lawyer’s report states that the formal fines imposed by the Treasury are clearly disproportionate and violate the fundamental freedoms of the European Union, since the current strict penalty regime can be an obstacle to the investment of Spanish companies and individuals in other States.
All this comes from 2015, when the European Commission initiated an infringement procedure against Spain for considering that the sanctions imposed by this informative declaration are disproportionate and are not justified to achieve the purposes pursued which are the prevention and fight against tax avoidance and tax evasion.
We were given another warning in 2017, but without success, although the national courts would have sided with the taxpayer in this matter.
Spain has already received numerous warnings, but we will surely have to wait for the next ruling of the EU Court trusting that it will adopt the Advocate General’s opinion on formal sanctions.