Modelo 720 – Spain’s Foreign Asset Declaration Explained

1. Who Needs to File Modelo 720?

Modelo 720 must be filed by Spanish tax residents (individuals and companies) who hold assets outside Spain that exceed certain values. If you are not a tax resident in Spain, you do not need to file, even if you own foreign assets (non-residents would instead declare Spanish assets via Modelo 210 or 720’s concept doesn’t apply to them).

So first, determine if you’re a tax resident – generally meaning you spend 183+ days in Spain or have your main base here.

If yes, then consider if in the previous year you had:

• Bank accounts abroad (including deposits, checking, etc. in foreign banks).
  
  

• Investment assets abroad (like stocks, bonds, mutual funds, life insurance cash values, or crypto held abroad since 2023 new rules).
  
  

• Real estate abroad (property or rights over real estate located outside Spain).
  
  

If the total value in any category exceeds €50,000 at December 31 (or average for bank accounts), you must file for that category. The categories are considered separately. Exceeding the threshold in one category triggers reporting for that category only (though if you file, usually you report all assets in that category).

Threshold details:

• Category 1: Aggregate balances of all foreign bank accounts > €50,000.
  
  

• Category 2: Aggregate value of all foreign securities, shares, funds, or insurance > €50,000.
  
  

• Category 3: Aggregate value of foreign real estate > €50,000.
  
  

If you are under the limit in all categories, you don’t file.

Once you’ve filed once, in subsequent years you only file again for a category if the total in that category increased by over €20,000 since the last report or you acquired new assets or closed assets previously reported. If no significant change, no need to file for that category again every year.

Deadline: The filing is due by March 31 of the year following the year in question (so for assets as of end of 2024, file by March 31, 2025).

2. What Information is Declared?

Modelo 720 is purely an informative return – you don’t pay taxes via this form. But you must give detailed info on foreign holdings:

• For bank accounts: Name of bank, address, account number, opening date (if in year), balance at Dec 31, and average balance for last quarter of the year.
  
  

• For securities/assets: Name of institution/broker, description of each asset type, number of shares, ISIN or identifying info, and value at Dec 31 (market value or cash surrender for insurance).
  
  

• For real estate: Type of property, address, date and value of acquisition, and percent ownership.
  
  

Essentially, Spain wants to know what you have abroad and its value. This data helps them later verify if you declare income (interest, dividends, rental or sale income) from those assets on your annual tax returns.

You submit the form online through the Agencia Tributaria website. It’s quite a lengthy form if you have many assets, as each must be input. Many folks have their tax advisor prepare it to avoid errors.

3. Penalty Regime (Post-2022 Changes)

Modelo 720 gained infamy for its draconian penalties: previously, an unreported asset could lead to a 150% tax penalty on its value considered unexplained income plus €5,000 fines per data point. The European Court of Justice struck down those aspects in January 2022 as disproportionately high.

Spain has since amended the penalty regime (retroactive to filings from 2020 onward). The new penalties are aligned with general tax rules:

• Fixed penalty per unreported data: €20 (used to be €5,000 each).
  
  

• Minimum penalty: €300 (used to be €10,000).
  
  

• Max penalty cap: €20,000 total (previously no cap).
  
  

• If you file late but before being notified, those penalties are halved.
  
  

• If assets were outside EU/EEA, penalties double (so €40 each, min €600).
  
  

• The special rule that treated the asset value as unexplained income with no statute of limitations is removed. Now normal 4-year statute applies. The tax authority can’t reach beyond 4 years for missed 720 info.
  
  

So, not filing or filing wrong is no longer a fiscal death sentence. But you can still face:

• A modest fixed fine, plus
  
  

• General fines for late declaration (generally €100 per form if late, or a bit more if requested by authorities).
  
  

Important: Just because the huge penalties were nullified doesn’t mean you should ignore 720. It’s still law to file, and now that penalties are “normal”, the tax office may be more assertive in enforcing it.

4. Examples to Illustrate

• Example A: You moved to Spain in 2025. You have a UK bank account with €30k, a share portfolio worth €45k, and no foreign property. Each category is below €50k, so for 2025 you do not file Modelo 720 in 2026.
  
  

• Example B: You are a Spanish resident and have:
  
  

  • Accounts in France totaling €60,000,
    
    

  • A rental flat in London worth €300,000,
    
    

  • No foreign stocks.
    You must file by March 31 detailing those French accounts and the UK property (two categories exceeded). You provide all required details.
    
    

• Example C: A resident has an account in Switzerland with €10k and forgets to declare it (under threshold, so that’s fine). But also had €75k in a brokerage in USA and didn’t declare by March 31. In 2027, the tax agency discovers it. Under new rules, they might fine:
  
  

  • €20 for not reporting the account number, €20 for the bank name, €20 for each “data” omitted. Suppose 4 data points = €80, doubled because outside EEA = €160.
    
    

  • Possibly a general fine for late filing if they consider it an unsubmitted form (maybe €300 min doubled to €600).
    Total perhaps a few hundred euros. Previously this could have been tens of thousands plus treating the €75k as hidden income with 150% penalty, so big difference!
    
    

• Example D: You filed a 720 in past for a property and two accounts. Since then, none increased by >20k and no new accounts. You do not file again until a threshold change. Always monitor year-end values to see if any crossing of +20k happens.
  
  

5. Relation with Annual Income Tax and Other Reporting

Modelo 720 is informational. However, it connects to other obligations:

• Any income these assets produce (interest, dividends, rental income, etc.) must be declared on your Spanish income tax (IRPF). The tax office will likely cross-check – if you declared a foreign asset but never show income from it, they might inquire (except non-income-producing assets like raw land or non-dividend stocks).
  
  

• If you sold a foreign asset, that sale might trigger needing to update or file 720 if proceeds moved to a new account or such, plus you must declare the gain on IRPF.
  
  

• There is a separate new Modelo 721 for crypto assets abroad (starting with tax year 2022 onward). Crypto held on foreign exchanges above €50k needs reporting by the same deadline. Crypto is not covered by 720’s old categories. Be aware if you hold crypto.
  
  

• Wealth tax: If you pay Spanish wealth tax, you’re already listing assets. But 720 still had to be done independently. Possibly in future 720 might evolve or be replaced by an annual wealth information return integrated with wealth tax.
  
  

• If you cease being resident, you’d file 720 for the last year you were resident (if applicable) then stop.
  
  

6. Practical Filing Tips

• Gather info early: Bank statements for year-end, etc., from abroad can take time. Start early in the new year.
  
  

• Use the AEAT software: The tax agency provides an online form or downloadable program for 720. It has many fields – fill carefully. Typos in account or address can lead to penalties per data point (though €20 now, still avoidable).
  
  

• Currency conversion: Values must be in euros using the official year-end exchange rates published by tax authority.
  
  

• Joint accounts or co-owned assets: If you own jointly with spouse or others, each person reports the full detail but indicates their share percentage. The value reported is either total with share or just share – instructions clarify (commonly you report total and your %).
  
  

• Maintain records: Keep copies of submitted forms and documentation of valuations in case of questions.
  
  

• Don’t forget closures: If you closed an account or sold a property that was previously reported, you need to file 720 for that year to inform the account was closed or property sold (even if no assets exceed 50k at end of year, a sale triggers obligation to inform cessation).
  
  

• Professional help: Given the complexity, many use a tax advisor to do the first 720 at least.
  
  

7. Summary of Changes After EU Ruling

To recap the major changes after the EU Court intervention, which is often a doubt among expats:

• No more 150% monster penalty for undeclared assets. Now they apply normal penalties and the 4-year statute of limitations.
  
  

• Greatly reduced fines: €20 per item instead of €5,000, minimum €300 instead of €10k, max €20k cap.
  
  

• These new rules apply to pending cases too, giving relief to those who were mid-procedure.
  
  

• However, Modelo 720 itself was not struck down, just the penalties. So the requirement remains in force; only if Spain hadn’t changed the law would further legal issues arise, but they did amend it in March 2022 retroactively.
  
  

As of now (2025), one must still file if thresholds are met. The EU ruling was a relief but not an abolishment of reporting.

Conclusion: Modelo 720 is an essential compliance task for Spanish residents with foreign assets. While it doesn’t involve paying tax directly, failing to report can lead to fines. Fortunately, the punitive measures have been scaled back to reasonable levels, making the obligation less frightening – but it’s still mandatory. By knowing the requirements (the €50k rule and categories) and organizing your information, you can file the 720 on time and avoid any issues. Always ensure consistency between what you report and your other tax filings to present a clear picture to the authorities.

If you have foreign assets and are unsure about your Modelo 720 obligations or need assistance preparing the declaration, our experts can help. Book an appointment for personalized guidance on foreign asset reporting and tax planning: Book an appointment.