Brussels Views Declaration of Assets Abroad in Spain as Illegal

The obligation to declare all assets abroad valued at 50,000€ or more has not only caused many residents, particularly foreign residents in Spain, a lot of hassle and untold stress, it has also resulted in heavy fines for others, and even caused some foreigners to return home in defiance of the law that was introduced at the end of 2012.

Now, however, the 720 Model, has been labeled as “illegal” by the European Commission in Brussels, due to the fact that it “infringes Community rights”, and the sanctions applied for failing to comply have been regarded as “disproportionate” when compared to similar sanctions in other cases.
For this reason, the EU will now go ahead and open a judicial case against Spain for this act that it sees as breaking the law.

This has Spain’s tax office very worried, as the declaration of assets abroad plays an important role in the fight against fraud.
Since its introduction, by using the 720 Model, 108,615 million euro of undeclared tax has been uncovered by the Spanish tax office investigators.
The fines handed out also generate a substantial amount of money for the Spanish taxman.

Since 2013, a total of 7,013 cases have been opened against either those that did not present their assets abroad declaration form, or against those who did in 2014 when they should have done so the previous year, or without fully offering all the information required.

These people face sanctions of 5,000 euro for each piece of missing information, or for data that is inaccurate, with a minimum of 10,000 euro. As well as this, their assets and bank accounts will be considered as undeclared wealth profit on their income tax return, and also incur heavy fines.

The 720 Model has been brought before the European Commission by many bodies who have denounced it.

Brussels will look into two main aspects of the Spanish law: the severity of the fines and the fact that the assets in question would not be subject to any statute of limitations, meaning that the tax office would have an unlimited time period in which to investigate the case.

However, there are also other aspects of the assets abroad declaration law that are questionable, although they have been rejected, including the right to circulate freely (people and money); data protection; the fact that the law is only written in Spanish, despite the fact that many foreigners are affected; the time period; and that the 720 Model can only be filled out online.


Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License