The tax implications of the late filing of Spanish Form 720 are important to know, as they can affect you considerably. In any case, and in general, it is always better to file an extemporaneous informative declaration of your tax return without prior requirement by the Administration, in this case the informative declaration on assets and rights abroad through the Spanish Form 720, than to risk not filing it, as the penalties in the latter case are always considerably higher, and in this and in any other tax in Spain.

Obligation to declare assets and rights abroad

As of 11 July 2021, the obligation to report virtual currencies located abroad was established through the Spanish Form 720 (Spanish General Tax Law): of the virtual currencies that you own, as well as the virtual currencies of which you are the beneficiary or authorised holder, or in any case have the power of disposal. This obligation is pending regulatory development that defines how the declaration will be filed.

System of infringements and penalties for Spanish Model 720 as amended by a judgment of the Court of Justice of the European: late filing of Spanish Form 720

Following an appeal against the inclusion of unjustified gains in the general taxable base in the Spanish tax period because they had not been declared in the Spanish Form 720, and the ruling of the Court of Justice of the European Union, which established that failure to comply with or late filing of the Spanish Model 720, it is established that:

  • The lack of statute of limitations for failure to file the Spanish Form 720 by legal persons is eliminated.
  • The penalty is a proportional fine of 150% of the tax calculated on the amounts corresponding to the value of the assets or rights, which can be accumulated with fixed fines.

For example:

If in 2016 you filed a supplementary self-assessment, that is, you corrected your tax return as an individual for 2012, adding as capital gains the amount of assets and rights that you owned abroad and that you had not declared on time in the Spanish Form 720, because you filed it after the deadline (late filing of the Spanish Form 720), and you claim that the assets located abroad had been acquired with income obtained in periods that were already statute-barred, but which you brought to light through the late filing of the Spanish Form 720, now the Spanish Administration must allow you to prove that the income with which you acquired the assets located abroad was obtained in statute-barred years.

If you need to declare your assets and rights abroad, using the Spanish Form 720, at Perez Parras Economists and Lawyers we are experts in International Tax Law. Contact us so that we can help you, give you a quote and make your declaration of assets abroad correctly, avoiding the penalties that any type of error in the Spanish Model 720 entails. Our professional team, with offices in the centre of Malaga and in Nerja, is made up of lawyers with double degrees in Law and Economics, bilingual and experts in national and international taxation, for residents and non-residents.