Modelo 720 — Spain’s foreign asset declaration, three thresholds and the post-2022 penalty regime

Modelo 720 is not one declaration with a EUR 50,000 threshold. It is three separate obligations, each with its own EUR 50,000 threshold, and breaching one of them means reporting every item in that group. The obligations sit in Articles 42 bis, 42 ter and 54 bis of the general tax management regulation, and the sanctions regime was rebuilt in 2022 after the Court of Justice found the Spanish penalties incompatible with EU law. This walks through the three groups, the counting rules, the once-then-only-on-growth filing pattern, and where the regime stands after the reform.

1. Three obligations, not one form

Modelo 720 is the vehicle for three distinct reporting duties in Real Decreto 1065/2007, the general regulation on tax management and inspection procedures:

• Article 42 bis — accounts at financial institutions situated abroad;
• Article 42 ter — securities, rights, insurance and annuities deposited, managed or obtained abroad;
• Article 54 bis — immovable property and rights over immovable property situated abroad.

The persons obliged are the same across all three: individuals and legal persons resident in Spanish territory, permanent establishments in Spain of non-resident persons or entities, and the entities referred to in Article 35.4 of Ley 58/2003. The statutory hook is the eighteenth additional provision of that law.

Each obligation carries its own separate EUR 50,000 joint threshold, and the thresholds do not aggregate across groups. A person with EUR 40,000 in foreign accounts, EUR 40,000 in foreign securities and a EUR 40,000 foreign apartment files nothing. The same person with EUR 55,000 in accounts and nothing else files the accounts group in full.

2. It is not only about ownership

Article 42 bis is drafted around six capacities, and this is the provision that catches people who do not consider themselves account holders. The duty covers all accounts of which the person is the holder, or in which they appear as representative, authorised person or beneficiary, or over which they hold powers of disposal, or of which they are the beneficial owner — beneficial ownership taking its meaning from Article 4(2) of Ley 10/2010, the anti-money-laundering statute, for accounts in the name of the persons or instruments that provision covers where those are resident or constituted abroad.

And the reference date is not the only date that matters. The obligation also extends to anyone who held any of those capacities at any moment in the year to which the declaration refers, even if they no longer held it on 31 December. Where the capacity ended during the year, the balance to report is the one at the date it ended.

Article 42 ter and Article 54 bis carry the same extension for holders and beneficial owners who lost the position during the year, and Article 54 bis then requires the transmission value and the date of transmission in addition to the standard fields.

3. The counting rules, group by group

The accounts group is the strictest because it has two figures rather than one. The average balance for the last quarter can exceed EUR 50,000 while the 31 December balance sits below it — a year-end transfer out does not remove the obligation, because exceeding either joint limit triggers it.

The all-or-nothing feature is the second point firms and advisers get wrong. Crossing the threshold does not mean reporting the items above it; it means reporting every item in that group, including small and dormant ones.

4. When you file, and when you stop

All three obligations run on the same calendar: the declaration must be filed between 1 January and 31 March of the year following the year the information refers to.

The pattern after the first filing is what makes the regime easy to breach quietly. In later years, filing is only obligatory where the relevant joint value has increased by more than EUR 20,000 over the value that determined the last declaration filed. Not over last year’s value — over the value in the last declaration actually submitted.

Facts: a Spanish-resident individual files modelo 720 for 2022 with foreign accounts totalling EUR 60,000. By 2024 the balance is EUR 74,000, and in 2025 it reaches EUR 81,000. No declarations were filed for 2023 or 2024 because each year’s increase was modest.

What the rule says: the comparison is against the figure in the last declaration presented — EUR 60,000 from the 2022 filing — not against the prior year. At EUR 81,000 the cumulative increase exceeds EUR 20,000, so a declaration is owed for 2025.

What the practitioner does: records the reference value from the last filed declaration and tests each year-end against that anchor rather than against the previous year-end. A rolling year-on-year comparison will miss the trigger every time growth is gradual.

There is also an absolute override. Regardless of thresholds and growth, filing is always obligatory in respect of accounts, securities, rights, shareholdings and properties for which the person’s holding or capacity was extinguished during the year — the cases that require the closing balance, or the transmission value and date.

5. What actually goes on the form

For accounts, Article 42 bis requires the full name and domicile of the banking or credit entity, full identification of the accounts, the date of opening or cancellation or of the grant and revocation of authorisation, and the balances at 31 December together with the average balance for the last quarter. The duty covers current accounts, savings accounts, term deposits, credit accounts and any other monetary accounts or deposits whatever their form or name and even where they bear no return.

For Article 42 ter, the fields track the asset type: entity name and domicile; the 31 December balance of holdings in the capital or own funds of legal entities, with the number and class of shares and their value; the balance of securities representing the transfer of own capital to third parties; the balance of securities contributed to a legal instrument, including trusts and fiduciary structures that can act in commerce despite lacking legal personality; the net asset value at 31 December for collective investment holdings; the surrender value of life or disability policies at 31 December, or the mathematical provision where the policyholder cannot exercise a full surrender right at that date; and the capitalisation value of temporary or lifetime annuities. Pure risk term policies covering only death or disability are outside the insurance limb.

For Article 54 bis, the fields are identification and type of the property, its location by country, locality, street and number, the acquisition date and the acquisition value — with the additional date and 31 December value for timeshare-type rights and for rights of use, enjoyment and bare ownership, valued under the wealth tax rules in Ley 19/1991.

Several exclusions apply across the groups: assets held by the entities referred to in Article 9.1 of the corporate income tax law; assets recorded individually and sufficiently identified in the accounts of resident legal persons or Spanish permanent establishments; and the same for resident individuals carrying on an economic activity who keep accounts under the Commercial Code. For accounts there is a further exclusion for accounts at foreign establishments of credit institutions domiciled in Spain that must be declared by those institutions under Article 37 of the same regulation, provided they could have been declared under the law of the country where the account is situated.

6. The sanctions regime after the Court of Justice

This is where the regime changed. In its judgment of 27 January 2022 in case C-788/19, the Court of Justice of the European Union found aspects of the legal framework attached to the obligation to declare assets and rights abroad incompatible with EU law. Among them, Spain applied fixed monetary penalties for failure to comply with the information obligation, or for filing modelo 720 late, that were more severe than the penalties in the general regime for comparable infringements.

Ley 5/2022 of 9 March 2022 amended the infringements and penalties regime in adaptation to that judgment. The consequence is that the declaration is now sanctioned under the general regime in Articles 198 and 199 of Ley 58/2003, developed by Articles 14 and 15 of Real Decreto 2063/2004 — Article 198 for failure to file on time where no economic loss is caused to the Treasury, and Article 199 for filing incomplete, inexact or false information. The infringements are assessed independently for each of the three information obligations within the form.

Facts: a client discovers in 2026 that a foreign account crossed the threshold in 2021 and no modelo 720 was ever filed. Their previous adviser had told them the exposure was potentially ruinous.

What the rule says: the special penalty regime that produced those figures was replaced by Ley 5/2022 following C-788/19. The analysis now runs through Articles 198 and 199 of Ley 58/2003, and the definitions of “dato” and “conjunto de datos” in Article 42 bis(6) — which set out what counts as a separate data item per entity and per account — determine how an Article 199 assessment is built.

What the practitioner does: re-runs the exposure under the current regime before deciding on a voluntary disclosure, and quantifies it per obligation rather than for the form as a whole. Advice given before March 2022 on this point is out of date.

7. FAQ

8. What to do, today

• Test the three groups separately. A single aggregated calculation across accounts, securities and property will produce the wrong answer in both directions.
• For accounts, compute both figures — the 31 December balance and the last-quarter average. Either joint figure crossing EUR 50,000 triggers the whole group.
• Record the anchor value from the last filed declaration and test the EUR 20,000 growth trigger against that, not against last year.
• Map the capacities, not just the ownership: authorisations, powers of disposal and beneficial ownership over foreign accounts each create their own obligation.
• Flag positions closed during the year — those are reportable regardless of thresholds, with the closing balance or the transmission value and date.
• Re-price any historic exposure under the post-Ley 5/2022 regime before acting on pre-2022 advice.

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