Form 720: Updates After the EUCJ Ruling

European union regulations

The European Union Court of Justice (hereinafter, “EUCJ“) issued a long-awaited ruling on January 27, based on the appeal filed by the European Commission against Spanish regulations about the informative declaration of assets and rights abroad, “Form 720”.


The ruling of the EUCJ agrees with the European Commission and establishes that the Spanish regulations are disproportionate in terms of the following aspects:

  • It allows the Tax Administration to regularize the tax owed for amounts corresponding to goods or rights abroad that have not been declared or have been declared with errors, without a time limit for prescription, a fact that allows an already consummated prescription to be nullified.
  • It establishes as a very serious infraction with a fine proportional to 150% of the calculated tax the non-declaration or declaration with errors of goods and rights abroad.
  • It establishes fixed amount fines (€5,000 for each piece of data or set of data with a minimum of €10,000 if there is a prior requirement from the Tax Authorities; €100 for each piece of data or set of data with a minimum of €1,500 if there is no prior requirement) whose amount bears no proportion to the penalties provided for similar offences in the purely national context.


New regulations

Consequently, now the Spanish legislator must adapt its regulations to what was decided by the EUCJ, a fact that should take place soon.

In any case, it is important to note that the ruling does not imply the elimination of Form 720, which will continue to be mandatory for those taxpayers with tax residence in Spain who have assets and rights abroad -as long as they exceed the established thresholds- concerning accounts, investments, real estate (and starting in 2022, cryptocurrencies).

The ruling of the EUCJ has an effect from the date of the rule that approved Model 720, so it shall allow taxpayers affected by a sanctioning file for non-filing, filing with errors or after the deadline, so that they can claim the return of the income made or to appeal said sanction.

For questions about the details of the effects of this ruling on your tax situation, do not hesitate to contact our tax advisors in Barcelona by email or phone.

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