If you’re a tax resident in Spain and hold assets abroad, you may be legally required to file Modelo 720 — a declaration of foreign assets introduced to combat tax evasion.
Though controversial due to its strict penalties (which have since been softened), non-compliance can still trigger serious consequences.
This article breaks it all down:
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Who must file Modelo 720
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What must be declared
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Deadlines and penalties
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Common mistakes to avoid
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Why it still matters
🧾 What Is Modelo 720?
Modelo 720 is an informative tax declaration — not a tax return.
You don’t pay tax directly by filing it, but failing to do so may expose you to penalties and audits.
👤 Who Must File Modelo 720?
✔️ You must file Modelo 720 if:
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You are a Spanish tax resident
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You hold assets abroad valued over €50,000 (per category)
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You didn’t already declare them previously (or they’ve increased significantly)
🧠 Non-residents do not have to file Modelo 720.
💼 What Must Be Declared?
There are three asset categories:
| Asset Type | Examples | Threshold |
|---|---|---|
| Bank Accounts | Checking/savings accounts abroad | €50,000 total |
| Securities | Stocks, bonds, life insurance, pensions | €50,000 total |
| Real Estate | Property or land abroad | €50,000 total |
Once filed, you only need to update in future years if:
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Total assets increase by over €20,000
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You sell or close accounts
🗓️ Filing Deadlines
| Period Covered | Filing Deadline |
|---|---|
| Jan 1 – Dec 31 | March 31 next year |
📝 Filing is done online via the Agencia Tributaria portal.
⚠️ Penalties (and Recent Legal Changes)
In the past, non-filing triggered:
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Fines of €5,000 per undeclared asset
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No statute of limitations
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150% penalties on undeclared wealth
🧑⚖️ The EU Court of Justice ruled these excessive and illegal. As a result:
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Sanctions have been reduced
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Modelo 720 is still required
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Fines are now in line with EU law
Still, the Agencia Tributaria may treat undeclared assets as unjustified gains and tax them if not reported.
💡 Example: When Filing Is Required
UK citizen becomes tax resident in Spain and owns:
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€60,000 in UK bank accounts
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€45,000 in a UK pension
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€100,000 rental property in London
✅ Must file for all 3 categories
📤 Submit online by March 31
❌ Common Mistakes to Avoid
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Assuming you don’t need to file if assets don’t generate income
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Forgetting to include jointly owned foreign accounts
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Not updating when value changes significantly
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Failing to keep documentation (proof of ownership/value)
✅ How to File Modelo 720
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Obtain digital certificate or Cl@ve PIN
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Log into the Agencia Tributaria site
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Complete online form by category
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Submit electronically before the deadline
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Save confirmation receipt
📌 All amounts must be declared in EUR, using official exchange rates.
🤝 We Help Expats Stay Compliant with Modelo 720
At Borderless Lawyers, we support:
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First-time Modelo 720 filers
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Expats with complex foreign asset portfolios
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Digital nomads & retirees moving to Spain
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Preventing audits and fines