The Tax form 720 is an informative tax model and its main purpose is to avoid the money laundering.
By the means of this form that has to be brought from the 1st of January to the 31st of March, residents in Spain must inform about their accounts, estate and investments abroad when valued over 50.000 euro.
Once lodged for the first time, the person subject to this form presentation will only have to bring it again if the value of any of the above mentioned three groups (accounts, estate or investments) have an increase of 20.000 euro or more.
The above seems right, however, what makes this model so controversial is the lack of proportion between its purpose and the fines, huge fines that can be imposed when someone forgets to lodge it or it is not lodged in time.
Fines; If you do not lodge the 720 tax model, the tax authorities will fine you with 5000 euro per block or missing data (remember there are three blocks) with a minimum fine of 10.000 euro. Furthermore, the value of your investments and assets abroad, if not informed by the means of the 720 tax model, will be considered as an unjustified benefit and will be punished with a fine of 150% of the amount that you are supposed to pay for this unjustified benefit in your yearly tax return.
If you lodge the 720 tax model beyond the expiry date (after 31st of March) then, you will be punished with a fine of a 100 euro per missing data or detail, by
example, if you have your money invested in 10 different products then they will be punishing you with 1000 euro, with a minimum fine of 1.500 euro.
The EUROPEAN COMISION has opened a proceeding against Spain for the lack of proportion of these fines- the process is in its very early stage so, at least this year, the obligation to inform by the means of the 720 tax model remains.
Our tax department will be pleased to study your case for free and to help you further if necessary.
Connie Raymundo – Lawyer & Barrister at Alicante Solicitors > Raymundo & Hopman.
Actio Legis 