Today we’ll delve into a crucial topic for citizens with assets and rights abroad: the submission of Model 720 and Model 721, due during the 1st quarter, with the deadline on April 1st.
In this article, we’ll explore in detail what these models entail, who is obliged to submit them, and their legal implications for taxpayers. Additionally, we’ll offer practical advice on fulfilling these obligations effectively and avoiding potential penalties.
What is Model 720?
Model 720 is an informative declaration that tax residents in Spain with assets and rights abroad must submit. Its purpose is to combat tax fraud and capital evasion, enabling the Spanish Tax Administration to be aware of taxpayers’ assets outside the country.
Who is obligated to submit Model 720?
Those tax residents in Spain with assets and rights abroad exceeding the thresholds set by law are required to submit Model 720.
What is Model 721?
On the other hand, Model 721 is an informative declaration that individuals and legal entities residing in Spanish territory must submit, concerning all virtual currencies situated abroad of which they are the owner, beneficiary, authorized party, or have any other form of disposal power, or for which they are the real owner, provided it exceeds the threshold set by law. Consequences of not submitting these models: Failure to submit Model 720 or Model 721, or submitting them with incorrect or incomplete data, can have serious consequences for taxpayers. Possible penalties include financial fines, surcharges, and even the inability to obtain necessary certificates for certain administrative procedures.
Tips for complying with tax obligations:
- Maintain a detailed record of all your assets abroad, including bank accounts, properties, investments, etc.
- Seek advice from a professional specializing in international tax law to ensure compliance with tax obligations.
- Submit Model 720 and Model 721 within the deadlines established by law, avoiding potential penalties for late submission.
- Carefully review the information provided in the declarations before submitting them, ensuring it is accurate and complete.
In summary, submitting Model 720 and Model 721 is an important obligation for taxpayers with assets and rights abroad or those transferring their tax residence outside of Spain. Proper compliance with these tax obligations is essential to avoid potential penalties and maintain a transparent and legally sound fiscal situation. Always seek professional advice if you have doubts regarding your international tax obligations.