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Important informative declaration
Since 2013, Spanish residents have been required to make an informative declaration of possessions abroad (‘model 720’) if they:
• have more than EUR 50,000 in foreign countries, eg savings deposits, investments / pension rights or real estate;
• or have access to them, for example through proxies.
The declaration must take place annually before 31 March. After the first declaration has been made, a subsequent declaration only has to be made if there is a variation in a category of more than 20,000 euros.
The declaration is informative. No tax has to be paid. The tax authorities will use the information for checks.
Controversial instrument to detect ‘undeclared money’
The intention of the tax authorities was to get a grip on the many Spaniards who have ‘undeclared money’ (also called ‘black money’ and in Spain ‘dinero B’) on foreign accounts. In the slipstream, however, foreigners have the same obligations if they are residents in Spain and if they still have a house or bank account in their own country (or other countries), and that is a large number.
Not submitting this declaration is fraud according to the Spanish tax authorities
Precisely because this declaration is an important tool for the Spanish tax authorities to trace ‘black money’, not submitting is seen as fraud and is heavily fined. In the case of ‘discovery’, the tax authorities then assume that the money not found is “black” and sets the fines so high that there is a possibility that the entire amount ‘discovered’ must be paid to the tax authorities as a fine.
The criteria for whether or not to file a declaration are complex. There are many questions and the interests (especially fines) are great. Take no risk, let yourself be well informed.
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