OBLIGATIONS OF RESIDENTS IN SPAIN WITH ASSETS ABROAD
Since the year 2012, All those taxpayers who own assets and rights located abroad may be obliged to present the model 720.
Who is required to submit this model?
Both headlines, authorized, beneficiaries, persons or entities with power of disposal or beneficial ownership that have accounts, values, rights, income insurance, Real estate and rights to real estate located abroad are obliged to present this model.
What is the model 720?
The Law divides assets and rights into three different groups, declarable in a single model and establishes the obligation of presentation provided that each group of goods exceeds the 50.000 euros. For subsequent years, the presentation is exempted if there is no increase in the valuation of each group of goods in the amount of 20.000 euros. For his part, the extinction of ownership of any property or right located outside of Spain and previously informed, will generate the obligation to the presentation of the same.
The sanctioning regime established for the model is especially burdensome. So For each undeclared data, a penalty of 5.000 euros with a minimum of 10.000 euros, To which should be added the integration of the value of assets and rights not declared as unjustified capital gain in the Income Tax Base of the last non-prescribed tax period. This is a sanction of the 150% of the personal income tax quota. So, if the Administration detects the existence of assets located abroad not declared, Undeclared assets may be insufficient to cover the penalties imposed by the Administration, generating a serious problem of confiscation.
The disproportionality in the imposition of these sanctions is motivated in the first place, because prescribed income can be integrated into the Income Tax Base, and even prescribed prior to the entry into force of the information regime. Secondly, the fines imposed for the non-presentation or presentation after the deadline of the model 720 are totally disproportionate to those imposed in the same situations of other informative returns.
To point out that the European Commission, in the face of the complaint filed in February 2013 initiated infringement procedure in which it manifests the breach by the Spanish Tax Administration of community freedoms and the breach of various constitutional principles, legal security, effective judicial protection, economic capacity, property rights and equality.
The unresolved conflict between the European Commission and the Spanish Treasury due to the application of sanctions and the ruling of the Spanish Courts, as is the case of the Superior Court of Justice of Castilla y León, which agrees with the taxpayer who presented the model after the deadline 720 and orders the Tax Agency to pay costs, They are notably increasing the appeals filed by taxpayers sanctioned in this regard.
Remember that the 31 March 2019 the deadline for submitting the model ends 720 from 2018. We are entering the last days so that all those obliged to present the declaration can do so and avoid the dreaded penalties of the Tax Administration.