Modelo 720 in Spain: The Foreign Assets Declaration Every Expat Should Know

If you have moved to Spain and still own a bank account, a property or an investment portfolio back home, there is a form you need to know about: the Modelo 720. It is an informative return, not a tax, but it has been one of the most feared obligations in Spanish taxation. Here is what it is, who must file it and what has changed in recent years.

What is the Modelo 720 and who has to file it?

The Modelo 720 is the «declaration of assets and rights located abroad». It is filed with the AEAT (Agencia Estatal de Administración Tributaria), Spain’s tax authority. Its purpose is to let the authorities know what Spanish tax residents own outside Spain. Simply declaring an asset does not mean you pay tax on it.

The obligation falls on tax residents in Spain. In general, you are a tax resident if you spend more than 183 days a year in the country, or if your main centre of economic interests is here. Many expats become residents without realising it, and with that status comes the duty to report worldwide assets. Companies and other entities resident in Spain are also covered. If you hold a NIE (Número de Identidad de Extranjero, the foreigner identification number used for all tax matters) but are not a tax resident, the Modelo 720 does not apply to you.

What you must declare and the €50,000 threshold

Foreign assets are grouped into three separate «blocks»:

• Bank accounts held with entities located abroad, where you are the holder, beneficiary or have authorisation over them.
• Securities, rights, insurance and income: shares, funds, bonds, life insurance and annuities contracted with foreign entities.
• Real estate and rights over real estate located abroad, such as a flat, land or a timeshare.

The key rule is that the €50,000 threshold applies to each block separately, not to your total wealth. If the combined value of one block exceeds €50,000, you must report that block. You could therefore owe a declaration for your foreign property while owing nothing for your bank accounts. Values are generally taken as of 31 December, and for bank accounts the average balance of the last quarter is also relevant, so always check which figure applies to each asset.

After the first declaration, you only need to file again in a later year if the value of a block has increased by more than €20,000 compared with the last declaration, or if you have sold or cancelled assets that were previously reported. If nothing material changes, you are not required to file again.

Deadline and penalties after the EU Court ruling

The Modelo 720 is filed electronically, between 1 January and 31 March of the year following the one being reported. That means a declaration covering the 2026 tax year is filed in the first quarter of 2027. Filing requires an electronic certificate, digital ID or similar secure access to the AEAT’s online office.

The penalty regime used to be notoriously harsh. Failing to file, or filing late, could trigger fixed fines per data item, and undeclared assets could be taxed as unjustified capital gains with no limitation period and surcharges of up to 150%. In January 2022, the Court of Justice of the European Union ruled that this system was disproportionate and contrary to the free movement of capital within the EU. Spain subsequently reformed the rules to align them with the ruling.

It would be a mistake to conclude that the form no longer matters. The obligation to file remains in force, and the authorities can still impose penalties for missing, late or incomplete declarations, though they are now more proportionate. The details of the current penalty regime and how it applies in each case should be checked against the latest legislation, because case law and administrative criteria continue to evolve. Filing correctly and on time remains by far the safest option.

Practical advice for expats

Keep a simple annual record of your foreign accounts, investments and property, with balances at year end. Check whether you also hold crypto or accounts that are easy to forget, such as old savings accounts or joint accounts with relatives. Note that cryptocurrencies held abroad have their own separate informative return (Modelo 721), so do not confuse the two.

At Zythos Business we help self-employed professionals and small businesses, including many international clients, to understand which obligations apply to them and to meet each deadline without surprises. If you are unsure whether you are a Spanish tax resident or whether your foreign assets cross the threshold, we can review your situation and prepare your declarations accurately and on time.