Most Argentines living in Spain do not know that must declare their assets abroad in excess of €50,000, or pay fines for not having done it on time.
In 2012, the Spanish government created the Model 720, an informative declaration of assets and rights located abroad with a value of more than €50,000. All tax residents in Spain must file it between January 1 and March 31, based on their net worth situation as of the previous December 31.
This is an informative declaration and does not imply in itself the payment of taxes. Later it will be decided whether or not to pay depending on the origin of those assets. But failure to file Form 720 can result in fines of up to 50% of the undeclared value, if the Tax Agency considers it to be an unjustified capital gain.
Another disadvantage of not declaring
To see it in numbers and with an example, let's suppose that Juan Carlos is an Argentinean resident in Spain. In 2023 he inherited an apartment of €100,000 in Argentina and did not file the Model 720. If the Spanish tax authorities later become aware of the existence of this property of Juan Carlos, they can penalize him for €50,000.
Faced with this situation, Juan Carlos thinks: "Well... I don't make the declaration. Total, how will the spanish tax agency find out that I have an apartment in Argentina? He will probably never find out that Juan Carlos has that property.
But the day that Juan Carlos sells that apartment in Argentina and bring the money to Spain, your problems will start. The first thing the Spanish Tax Agency will do is to ask where the money came from. Juan Carlos will be able to prove that he inherited it from his mother in 2023. But we will be in 2025 and the period in which he had to declare that he had that property will have already expired. Therefore, he will be sanctioned for very high amounts.
Inform yourself before selling
It is possible that Juan Carlos is like many Argentines who consult us in our office. They find out about the existence of the Model 720 after having sold properties in Argentina and want to transfer their capital to Spain. Then they see that they can no longer bring in the moneyIf they manage to bring it, they cannot deposit it in their bank. At this point, it will be necessary to evaluate if it is convenient to bring the money and pay the fine, or to leave it in Argentina.
To avoid this situation of having capital in Argentina and not being able to bring it to Spain is why we wrote this post. We recommend you to do the Model 720, if you still have time. In other words, if on December 31, 2025 your wealth abroad exceeds €50,000, you will have to declare it between January 1 and March 31, 2026. As long as that capital has been received or generated in 2025, because if you had it before it will be too late to declare it.
To calculate if the assets exceed 50.000€, the sum of the following are considered:
- Accounts in banks abroad.
- Company shares, rights, insurance and income managed or obtained abroad.
- Real estate and rights over real estate.
Cryptocurrencies should not be included If you have cryptoassets abroad for a value of €50,000 or more, you must declare them using Form 721. You can find more information in this post of our blog: How to declare cryptocurrencies abroad, if you live in Spain.
It is important to clarify that you must declare all assets abroad that exceed €50,000, even if your share is less than that amount. For example: together with two siblings you have an apartment in Argentina worth €60,000. Your share is worth €20,000, but you have to declare it. The same with bank accounts. If you and your partner have a joint account with 60.000US$, you both have to declare it in the Model 720.
The statute of limitations for failure to file Form 720 expires after four years.
When will it be presented again?
After filling out the Form 720 for the first time, it should only be done again when the annual increase has been more than €20,000 with respect to the last declaration.
Once the Model 720 has been filed, the Tax Agency will be aware of your assets. Therefore you will be able to declare in your annual income tax return the income they generate abroad. In this case, the income tax return is a liquidation where you must report all the income worldwide and is taxed only on the profits obtained.
The information provided by the Spanish government on its website is quite clear. But sometimes some clients have doubts as to when an asset is considered to have passed into their ownership. This usually happens with inheritances. Another question we are asked is how to determine the value of a property in ArgentinaOr what exchange rate to use, official or blue? We are also asked how to regularize when the deadline for filing the Form 720 has expired. These doubts must be analyzed case by case.
We are a Barcelona-based law firm specialized in helping Argentinians open businesses in Spain. If you have any questions about your particular case, please do not hesitate to contact us.. The fees of our lawyers for one hour of consultation in person or by videoconference are 150€.
