Spanish Government Approves New Reduced Fines For Controversial Modelo 720 Asset Declaration Law
Spain News
Published: 25 February 2022 16:00 CET
Spanish MPs have unanimously approved a new set of fines for the controversial asset declaration law commonly referred to as Modelo 720.
The vote means that the huge fines that were previously being dished out to residents in Spain for not declaring overseas assets will now be more in line with general tax fines.
It is believed that the new fines will range from around €150 to €250, however, the obligation to report foreign assets over a certain amount will be maintained.
As is the usual case for tax crimes in Spain any claims will have a limit of four years with a maximum fine for the most serious cases set at 50% of the amount defrauded.
Under the current regime, Spanish citizens who have foreign assets of more than €50,000 including investments, offshore bank accounts and real estate must report them each year when completing their tax returns.
The move by the Spanish government follows a decision by the European Union’s Court of Justice (CJEU) on January 27 which ruled that the 720 legislation was “disproportionate” and restricted the free movement of capital within the EU.
They also said that the fines which were imposed by late or non-declaration of assets were also “excessive” with residents often fined more than 150% of the value of the original asset. They also said that the sanctions “contravened EU law” and far exceeded those imposed at a national level with fixed minimum fines of between €1,500 and €10,000.
The original legislation which has always been controversial was promoted by the former Minister of Finance, Cristóbal Montoro and maintained by the current minister, María Jesús Montero.
Following the decision, Montero said that the new fines would come into force from March 31 and apply to the tax period beginning January 1, 2020.
The case dates back to 2015 when the European Commission decided to sanction Spain for requiring resident taxpayers to declare the properties, bank accounts or financial assets they held abroad. The lack of compromise and a solution led Brussels to bring the case before the European courts in June 2019.
Source
https://www.eleconomista.es/economia/noticias/11636406/02/22/El-Congreso-avala-sin-votos-en-contra-las-nuevas-sanciones-del-Modelo-720.html
https://www.rtve.es/noticias/20220224/congreso-avala-nuevas-multas-hacienda-bienes-extranjero/2296681.shtml
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