Spain’s Authorities Annul All 720 Tax Fines

Spain's Tax Authorities Annul all fines for Form 720 declaration of assets held abroad

Spain’s Hacienda tax agency has cancelled all fines issued for the Form 720 declaration of assets abroad more than a year after the Court of Justice of the European Union (CJEU) ruled against these sanctions in January 2022, which considered them disproportionate.

The decision obliged the Hacienda to correct aspects of this declaration form for taxpayers with more than 50,000 euros in assets abroad. These taxpayers had to render accounts to the tax authorities at the risk of fixed fines that could exceed the value of what had not been declared, either due to omitted or inaccurate data, or if it was communicated after the deadline.

In its judgment, the CJEU noted the “extremely repressive nature” of the high fine and underlined “that its cumulation with the additional fixed fines can in many cases result in the total amount of the sums owed by the taxpayer exceeding 100% of the value of his assets or rights abroad”.

Modelo 720

“The penalties are declared null and void and will have to be refunded,” said a source at the Ministry of Finance. Refunds will be made for all the fines whether they have appealed or not.

When the moves to adjust the 2012-introduced form began in January 2022, the Minister of Finance, María Jesús Montero, indicated that it was necessary to study each appeal on a case-by-case basis, calculating that the cost to the Hacienda for these refunds would amount to around 230 million euros.

At the time, data from the tax agency indicated that a total of 60,000 taxpayers filed this form, which according to their estimates had allowed more than 223 billion euros to be recovered since 2012.

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