2022 Guide To Being A Tax Resident in Spain.
As a tax
resident of Spain one has the legal duty of declaring your worldwide
income as well as the ownership of foreign assets. The declaration of
overseas assets has to be submitted via the “Modelo 720” form
which may sound familiar to some but new to people who have recently
become tax residents in Spain.
720” form has to be filed with the Spanish Tax Authorities
(Hacienda) between January 1st
and March 31st
with regards to assets held in the previous year so all relevant
information for the year 2021 must be submitted by the end of March
of this year.
that the submission of said form is a tax requirement and does not
constitute a tax liability on the assets declared.
If assets held
outside of Spain have a total value of more than €50,000 (in each
category) then the “Modelo 720” form must be filed and include
the following asset groups:
- Bank accounts or deposits held in financial institutions abroad
- Financial securities or equity holdings
- Property or property rights
The list within
each group is extensive and as of last year now includes any
cryptocurrency held abroad on a platform or via a wallet outside
Spain for example.
the “Modelo 720” can only be filed online and not in person so
this may be cumbersome for some people, (language barrier to start
with), so the use of a tax adviser is recommended to ensure the form
is filed on time and with all the detailed information as this will
have to coincide with the information provided on your annual tax
return (Declaración de la Renta) to be submitted every year.
A tax adviser
is highly recommended as the penalties for late submission or
providing incorrect information can be very severe (up to €10,000
in some cases and/or 150% of the tax liability of undeclared assets
In 2019 the
European Union took legal action against Spain with the European
Court of Justice regarding the severity of these penalties as they
consider them discriminatory. Whatever the ruling on the penalty
regime (sentence to be issued on January 29th)
the obligation to file the form will remain in place.
If you have
filed the “Modelo 720” form in recent years you are only obliged
to submit a new one if the value of your assets increase by €20,000
in comparison to the previous year or you dispose of or purchase new
assets and/or close existing bank accounts.
We hope you
found this short blog informative and useful. European Financial
Planning Group or simply “efpg”
are not tax advisers and this article does not constitute tax advice.
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Disclaimer: Please note the above is for information purposes only and does not constitute tax advice