Good to know · Taxes

Modelo 720 - declaration of assets and rights held abroad

Modelo 720 is an informative (no-tax-due) annual declaration that Spanish tax residents (individuals and entities) must file if the value of any one of three asset categories held abroad — (1) bank/deposit accounts, (2) securities/shares/insurance/rights, (3) real estate or rights over real estate — exceeds EUR 50,000 as of 31 December (or, for accounts, the average balance in the last quarter), assessed separately per category. It is filed online between 1 January and 31 March of the year following the one reported. A subsequent year’s filing is generally required again only if a category’s value increased by more than EUR 20,000 versus the last declaration, or an asset was disposed of. On 27 January 2022 the Court of Justice of the EU (CJEU/ECJ), in case C-788/19 (European Commission v Kingdom of Spain), ruled that Spain’s then-penalty regime for Modelo 720 violated EU free movement of capital (Article 63 TFEU) because it was disproportionate. The Court objected to three specific features: (1) treating undeclared foreign assets as 'unjustified capital gains' with no realistic possibility of the statute of limitations ever applying, which it found created excessive legal uncertainty (it did NOT object to the underlying presumption itself, only to its unlimited-in-time consequence); (2) a 150% proportional fine (which could stack with flat-rate fines and in combination exceed 100% of the asset’s value), because it was pegged to the reporting failure rather than to unpaid tax, had no cap, and was excessively punitive; and (3) flat fines per missing/late/incorrect data item that were far higher than the equivalent fines (LGT Articles 198-199) for comparable purely domestic reporting failures, with no overall cap. Spain’s General Tax Law was subsequently amended (a consolidated-text modification dated 10 March 2022 was identified when we checked, consistent with a legislative response in the immediate aftermath of the ruling), but we could NOT confirm, from an official source, the exact current post-reform penalty amounts/article numbers now in force for late or omitted Modelo 720 filings.

Why it matters

One of the most important and most-feared compliance obligations for Americans and other foreigners becoming Spanish tax residents with assets left in their home country (bank accounts, brokerage accounts, US retirement accounts, home real estate, etc.). The pre-2022 penalty regime was famously harsh (potentially confiscatory); the 2022 EU ruling significantly reduced legal risk, but newcomers relying on older online guides may see outdated, now-invalid penalty figures (the old EUR 5,000-per-item/EUR 10,000-minimum fines and 150% proportional fine described in many still-circulating articles were the regime the ECJ struck down).

When

Becoming a Spanish tax resident while holding foreign (non-Spanish) bank accounts, securities, or real estate worth more than EUR 50,000 in any one category.

How long it takes

Annual, 1 January – 31 March for the preceding calendar year’s foreign-asset position.

Official page

Last checked

15 Oct 2026

Do these first

• Spanish tax residency rules (183-day rule and other tests)