Modelo 720: Foreign assets declaration

Modelo 720 is the informative declaration in which tax residents in Spain report to Hacienda all assets and rights held abroad when their value exceeds 50,000 € in any of three categories. It is a purely informative declaration: it does not involve any tax payment. Beneficiaries of the Beckham Law regime are exempt from this obligation.

Important: Modelo 720 is a mandatory declaration when the threshold is met. Although it does not involve any payment - it is purely informative - failure to file can result in penalties and serious tax consequences.

Who must file Modelo 720

All tax residents in Spain (autónomos, employees, and legal entities) who hold foreign assets exceeding 50,000 € in any of these three categories must file:

• Bank accounts: Current accounts, savings accounts, or deposits at foreign financial institutions
• Securities and funds: Shares, investment funds, life insurance policies, and income managed abroad
• Real estate: Properties located outside Spain

Each category has its own independent 50,000 € threshold. Only the categories that exceed the threshold need to be declared.

Filing deadlines

Modelo 720 is filed once per year:

• Deadline: March 31 (if it falls on a weekend or public holiday, it extends to the next business day)
• Period covered: Assets as of December 31 of the previous year

When you need to refile

After the initial filing, you only need to refile Modelo 720 when:

• The value of a previously declared category has increased by more than 20,000 € compared to the last declaration
• You have acquired new assets abroad in a category not previously declared

Penalties

The original Modelo 720 penalties (5,000 € per data item, minimum 10,000 €) were struck down by the EU Court of Justice in January 2022 as disproportionate. Since the 2022 reform (Ley 5/2022), the standard penalty regime under Ley General Tributaria applies. The main risk of not declaring is that Hacienda can treat undeclared foreign assets as ganancia patrimonial no justificada, taxed at the general rate plus surcharges and late-payment interest. Late filing carries the standard penalties established in the Ley General Tributaria.

How the 50,000 € threshold works

The 50,000 € threshold applies per category, not across all your foreign assets combined. This means you could have, for example, 40,000 € in foreign accounts and 40,000 € in a property outside Spain and not be required to file Modelo 720, because neither category individually exceeds the limit.

Once you have filed for a category, you do not need to refile it in subsequent years unless:

• The value of that category increases by more than 20,000 € compared to the last declaration filed, or
• The assets declared in that category are extinguished through transfer or cancellation (sale, account closure, etc.): the AEAT treats the transfer or cancellation as a reason to file for that tax year, regardless of any balance increase.

The filing period runs from January 1 to March 31 of the year following the declared tax year.

Foreign real estate: how to value it and what to declare

The value declared for real estate is the acquisition value: the price you paid when you bought the asset, plus the expenses and taxes inherent to the acquisition (notary, registration, local taxes). Current market value and cadastral value are not used.

Any immovable property located outside Spain of which you are the owner or over which you have real rights (usufruct, bare ownership, etc.) counts toward the threshold for the real estate category.

The case of an apartment in Ukraine or another Eastern European country

Many foreign autónomos in Spain keep properties in their home countries - Ukraine, Poland, Romania, and others. If the acquisition value (price paid plus costs and taxes of the purchase) exceeds 50,000 €, the obligation to declare exists regardless of whether the property is rented out, vacant, or damaged.

For properties acquired before becoming a Spanish tax resident, the real cost at the time of purchase is used as the acquisition value. If the original documentation is in a local currency, it is converted at the exchange rate in effect on the acquisition date.

The trap of "selling and bringing the money to Spain"

A common mistake: not declaring the property in Modelo 720 and then, years later, selling it and transferring the money to a Spanish bank account. At that point the bank is required to apply anti-money-laundering rules and will ask for justification of the origin of the funds.

Without a clear documentary trail - which Modelo 720 would precisely have generated - it can be very difficult to show that this capital existed before you became a tax resident. The real risk is that Hacienda treats it as a ganancia patrimonial no justificada and imputes the full amount as income at the general IRPF rate, plus surcharges and interest.

Filing proactively in Modelo 720, even when you are not entirely sure whether you exceed the threshold, documents the origin of the assets and avoids this problem.

Imputed rental income: the annual tax cost of a vacant property

Owning a property abroad (other than your main home) has a tax consequence that surprises many people: even if the property generates no income - it is vacant or made available for free - Spain imputes an annual presumed real-estate income that you must declare in your IRPF (Modelo 100).

The amount is calculated as 2% of the cadastral value of the property (or 1.1% if the cadastral value was revised through a collective assessment effective from January 1, 2012 onward). For properties in countries without an equivalent cadastral value, 1.1% is applied to 50% of the greater of two values: the acquisition price or value, or the value assessed by the authorities for other tax purposes.

This imputed real-estate income is automatic once the property appears in your Modelo 720. It is recorded in the "real-estate income" section of the Renta.

Selling a foreign property: capital gain taxable in Spain

If you sell the property abroad while you are a Spanish tax resident, the gain is taxed here as a capital gain in the savings base (progressive scale from 19% to 30% in 2026).

The calculation is:

• Sale price (net of selling costs) minus
• Acquisition value declared in Modelo 720 (plus purchase costs and taxes)

If the country where the property is located also taxes the gain, it may be possible to apply the international double-taxation deduction provided in the double-taxation treaty between Spain and that country, or failing that, the general mechanism of article 80 of the Ley del IRPF.

Penalty regime after the 2022 European ruling

The original Modelo 720 penalties - 5,000 € per data item, with a minimum of 10,000 € - were declared contrary to EU law by the Court of Justice of the European Union in its ruling of January 27, 2022 (Case C-788/19). The legislative response was Ley 5/2022 (in force from March 11, 2022), which abolished the specific penalty regime, the imputation as imprescriptible unjustified capital gain, and the 150% fine, aligning breaches with the ordinary sanctions of the Ley General Tributaria.

The main risk of not filing remains the possible classification of undeclared assets as ganancia patrimonial no justificada, taxed at the general marginal rate plus ordinary surcharges and late-payment interest. The 150% proportional fine that previously existed was abolished by Ley 5/2022 and is no longer applicable.

Modelo 721: cryptocurrencies abroad

If you hold crypto assets in foreign platforms or exchanges (Binance, Kraken, Coinbase, etc.), do not declare them in Modelo 720. There is a separate filing for this: Modelo 721, also filed annually (January-March) with a 50,000 € threshold for all cryptocurrencies combined.

Online filing

Modelo 720 is filed exclusively online through the Agencia Tributaria Sede Electronica. You will need:

• Digital certificate or Cl@ve PIN to identify yourself
• Detailed information on each asset: institution, account number or reference, country, value as of December 31, and average balance for the last quarter (for bank accounts)