If you are a tax resident in Spain and own assets outside the country, you may have the obligation to file the informational declaration Modelo 720. This form is used to disclose foreign assets and forms part of the reporting obligations under Spanish tax law.
It is important to understand that the obligation to file Modelo 720 depends not only on the fact of owning assets abroad, but also on their category and value. Spanish tax regulations distinguish three main categories of foreign assets that are considered when filing the Modelo 720 declaration.
Bank accounts abroad
The first category includes bank accounts opened outside Spain. These may include:
- current accounts
- savings accounts
- deposit accounts
If a Spanish tax resident holds bank accounts abroad, these assets may be subject to reporting when the established threshold is exceeded.
Even if the account is rarely used or does not generate income, the mere existence of a foreign bank account may be relevant for tax reporting in Spain.
Real estate outside Spain
The second category includes real estate located outside Spain. These may include:
- apartments
- houses
- land plots
- other types of property
Many tax residents in Spain retain property in other countries after relocating. In some cases these properties are used for personal purposes, while in other cases they remain unused and do not generate income.
Nevertheless, foreign real estate must also be considered within the Modelo 720 declaration, since Spanish tax legislation applies to the global assets of tax residents.
Securities and investments
The third category includes financial assets and investment instruments located outside Spain. These may include:
- shares of foreign companies
- ownership stakes in companies
- investment funds
- brokerage accounts
- insurance products with an investment component
For investors operating through international brokers, this category is particularly relevant. Even if transactions are carried out on foreign platforms, these assets may still fall within the scope of Spanish tax reporting obligations.
Why it is important to understand asset categories
A key feature of Modelo 720 is that each category of assets is assessed separately. This means that the obligation to file the declaration may arise for one category of assets even if the threshold is not exceeded in other categories.
Therefore, tax residents in Spain should determine in advance which category their foreign assets belong to and whether they must be considered when filing the Modelo 720 declaration.
Conclusion
Modelo 720 applies to three main categories of foreign assets: bank accounts, real estate and financial investments. For tax residents in Spain, understanding these categories helps correctly assess their reporting obligations regarding international assets.
RoboTaxMaker helps structure data related to international assets and simplifies the preparation of tax reporting in accordance with Spanish tax regulations.