For tax residents in Spain who hold assets abroad, filing the Modelo 720 declaration is an important part of tax reporting. Although this form is informational and does not involve paying tax, mistakes often occur during its preparation.
In practice, most problems are related to technical inaccuracies and incorrect valuation of foreign assets.
Technical errors when completing Modelo 720
Modelo 720 is submitted electronically through the system of the Spanish Tax Agency (Agencia Tributaria). Therefore, the accuracy of the information provided is extremely important.
The most common mistakes include:
- incorrect identification of the bank account or financial institution
- errors in the account number or IBAN
- incorrect dates of opening or closing of assets
- incorrect classification of the type of asset
Even small inaccuracies may lead to the need to submit a corrected declaration.
Errors in the valuation of assets
Difficulties often arise when determining the value of foreign assets. This applies to:
- bank accounts held abroad
- investment portfolios and securities
- ownership stakes in companies
- real estate located outside Spain
Many mistakes occur when working with reports from international brokers, where information is presented in different formats and currencies.
Errors in determining the €50,000 threshold
Another common mistake is related to misunderstanding the reporting threshold.
It is important to consider:
- the €50,000 threshold applies separately to each category of assets
- assets within the same category are aggregated
- exceeding the threshold in one category creates the obligation to file the declaration
An incorrect assessment of the threshold may result in the Modelo 720 declaration not being filed on time.
Why it is important to avoid mistakes
Most errors occur due to the complexity of preparing the reporting and the specific features of Spanish tax legislation.
RoboTaxMaker helps structure information about foreign assets and simplifies the preparation of tax reporting for tax residents in Spain.