During the first quarter of the year, a portion of taxpayers faced the dreaded declaration of property abroad. A process linked to the presentation of the Model 720.
Having bank accounts, stocks or real estate in a foreign country is not a crime. As long as they are properly declared.
The formula for communicating it to the Treasury is Model 720, for declaration of assets abroad. Born with the fiscal amnesty of late 2012.
This document is both a small step for the taxpayer, but a huge headache if there are errors or information is omitted. The sanctions, which can go from 20,000 euros onwards, have been criticized by Brussels.
An oversight that can get very expensive. Especially now that we are in full process of declaration of property. Between the months of January and March.
It worths remembering the most important details!
What is this statement?
Model 720, a declaration on goods and rights located abroad, is the system of compulsory use to communicate to the Treasury the existence of accounts, banking products, shares, properties or any other property outside the national territory.
Its implementation, in 2012, coincided with the last fiscal amnesty. As a formula for a greater number of taxpayers to declare hidden goods abroad. System linked to a strict system of sanctions that have not hesitated to criticize from Europe.
However, over the years, the severity of the fines and the prescriptions related to the amnesty have made it lose its meaning.
Who does the Model 720 affect?
The declaration of assets abroad affects any natural or legal person who, residing in national territory on 31 December of the previous year, is in one of the three situations described by the Tax Agency.
Holders or affiliates (authorized, representatives, usufructuaries or beneficiaries) with bank accounts domiciled abroad.
Holders of some type of value, insurance, right or rent (temporary or lifelong) that are in deposit, management or have been obtained in another country.
The holders of any real property or real right over it located abroad.
What goods should be declared?
The goods to be declared, obligatorily are:
Bank deposits and current accounts active in a foreign country at 31 December of the previous year with average balances exceeding 50,000 euros.
Values, income, insurance or rights in deposit, for the management or as a result of profits abroad for amounts over 50,000 euros.
Real estate or real rights over them for a value of more than 50,000 euros.
What fines do you have to deal with?
The presentation system is not complex, but the sanctioning regime does. Both by errata and by the concealment of information.
To present the Model 720 unfinished, inaccurate or falsifying data is a penalty of 5,000 euros for each data, and 10,000 for each set.
So that avoiding data from a current account and immovable property in the same statement can mean a minimum of 20,000 euros.
Do you have to declare year after year?
The declaration of assets abroad through the Model 720, must be reappeared if in relation to the last year there have been gains over 20,000 euros for each patrimonial block.
Loss of ownership, authorization, representation or beneficiary status must also be reported in accounts and in securities and real estate declared in previous years.
Will there be news in the Model 720?
The disagreement between the Treasury and the European Commission in relation to the Model 720 regulations could end up in the Court of Justice of the European Union.
To avoid this, the Ministry of Finance is studying the possibility of easing sanctions and changing its imprescriptible character.
Changes could include a limit to cumulative fines imposed for formal errors. It also contemplates applying smaller sanctions for undeclared goods within the EU or in countries with bilateral agreements for the exchange of tax information.
