Expats living in Spain with assets abroad and Modelo 720 ruling

EXPATS living in Spain with assets abroad and Modelo 720 ruling following decision of the European Court of Justice.
JUDGING by recent news reports, you could be forgiven for thinking that Spain’s egregious Modelo 720 Worldwide Asset Declaration reporting requirement is already dead and buried since the European Court of Justice (ECJ) declared aspects of it illegal on Thursday January 27.
The bad news is the Modelo 720 will almost certainly live on in one form or another. The good news is, it will be a milder financial threat to expats living in Spain.
The Spanish press reported it as a “severe blow” to the 720 form, and attention has immediately switched to how people can claw back the fines they have suffered at the hands of the Modelo 720 since it was introduced by the Partido Popular (PP) finance minister Cristóbal Montoro back in 2013.
Realistically, the Modelo 720 tax declaration form isn’t going anywhere. It will just be tweaked to get around the ECJ’s objections and carry on being a headache for expats in Spain with assets of €50,000 or more (per asset class) abroad.
The good news is the fines and penalties for falling foul of the Modelo 720 are expected to be much lighter, so it won’t be such a big risk for expats living in Spain.
The Modelo 720 was introduced in 2013 ostensibly to clamp down on tax evasion and corruption and as the PP party at the time stank of corruption, the law was introduced with an amnesty that basically allowed bent politicians and their cronies to legalise wealth with just a slap on the wrist, whilst expats with legitimate wealth outside of Spain were put in a risky situation.
If you didn’t know about the new law, or made any mistake in your declaration, you could be ruined by huge fines so let’s now hope for the best rather than the worst as amendments take place.
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