ITS STILL HERE BUT WHAT´S CHANGED……
We are fast approaching the 2022 deadline to file the Modelo 720.
Here we are in March 2022, nine years on from when the Spanish authorities launched their new “anti-fraud” plan to prevent tax evasion. We were initially advised it was aimed at Spanish nationals trying to hide their assets overseas, but quickly realised that most people affected were the International community with assets back home……
This law was introduced back in 2013, at the time the authorities didn’t really highlight this requirement very well and most of the country were not aware it had been passed. Fast forward to 2022 and I am still meeting people on a regular basis who have never heard of it.
So here it is, a brief outline of the Modelo 720 and what you need to do.
WHO HAS TO REPORT?
Any person, permanent establishment or company who is tax resident in Spain and is the owner, titleholder, representative, authorised person, beneficiary, or has disposal powers of assets located outside of Spain worth more than €50 000 (see assets below), must report the value of these assets.
WHEN DO YOU REPORT?
Between 1 January and 31 March of each tax year.
WHICH ASSETS MUST BE REPORTED?
There are three main asset classes that need to be reported if the total value of each class is over the €50 000 limit:
Bank/Building Society accounts located outside of Spain – It is important to note that if you hold several bank accounts and the TOTAL amount held exceeds the €50 000 limit, then ALL the accounts need to be reported, even those with a nil balance.
Investments / Life or disability insurance policies – If you are the owner or policyholder of an investment or insurance policy then these will need to be declared if they exceed €50 000. Again, there is a requirement if you have multiple investments or policies, that if the total value exceeds the limit then they will all need reporting. Interestingly if you are holding what we describe as Spanish compliant Life Insurance Bonds, then the onus of reporting on the Modelo falls to the institution themselves.
Property – Owners or part owners of an overseas property where the value exceeds the limit must report these properties.
NOTE – You need to report the Modelo 720 again if any of your asset classes have increased by over €20.000 since they were last reported