The filing period for submitting Modelo 720 “informative declaration on assets and rights located abroad” for fiscal year 2023 is from January 1 to March 31, 2024. Modelo 721 for cryptos has the same filing period.

Modelo 720 for assets abroad

Taxpayers must report on the assets and rights they have abroad, (1) bank accounts in financial institutions, and (2) securities, rights, insurance, and income deposited, managed or obtained outside of Spain (3) and real estate. The obligation to declare any of these three blocks for the first time is excluded when the value of the block does not exceed €50,000.

For those who filed Modelo 720 in previous years, the presentation will only be mandatory when the corresponding block balance (bank accounts, investments or real estate) has experienced an increase of more than €20,000 compared to those that determined the presentation of the year’s declaration previously stated. In any case, the presentation of the report will be mandatory for those assets already declared and with respect to which the taxpayer loses the condition that determined the obligation to declare.

This model must be submitted electronically, without paper submission being possible.

What types of assets and rights are declared? What is included in each block?

• Accounts in financial institutions located abroad. The name of the banking entity, its address, the identification of the accounts, the dates of opening or cancellation, the balance as of December 31, the average balance of the last quarter, the date on which the condition ceased to be included must be included. of owners, representatives, authorized persons, beneficiaries, or person with power of disposition.
• Securities, rights, insurance, and income deposited, managed or obtained abroad. In the case of securities, the company name of the entity or the third-party transferee must be stated, as well as the address, balance as of December 31 and number, class of shares and value. In the case of rights, rights representing the transfer of own capital to third parties are included. Regarding insurance, it is necessary to inform about the name of the insurance company, the address, and the surrender value of the policy as of December 31. Regarding temporary or life annuities, information must be provided on the company name of the insurance entity, its address, and the capitalization value as of December 31.
• Real estate and rights over real estate located abroad. Its identification, situation (country, town, street, number), the date of acquisition and the acquisition value will be detailed (it will depend on whether it is full ownership, usufruct, bare ownership or other cases).

Who is obliged to present it?

Natural and legal persons residing in Spanish territory, permanent establishments in said territory of non-resident persons or entities and entities in attribution of income (communities of property, civil companies, recumbent inheritances…)

The obligation cannot be waived by the fact of having closed the bank accounts or having sold the shares throughout the 2023 financial year, since those who have been holders or authorized at any time during the year are required to declare.

Modelo 721. Annual informative declaration on virtual currencies located abroad.

Starting this year 2024, cryptocurrencies deposited abroad must be declared. This is how modelo 721 arises, after the approval of the Anti-Fraud Measures Law in 2021, the Treasury launched the modification of the Tax Law.

The previous modelo 720, does not take into account how cryptos must be declared abroad, which is why the Ministry of Finance has developed the modelos: 721, 172 and 173. The people who will have to use these new models are all those who are holders or investors of cryptocurrencies, as well as services that offer cryptocurrency exchange and custody of cryptographic keys.

Who is Modelo 721 aimed at?

Specifically, modelo 721 is aimed at individuals who own cryptos and have a portfolio with a value of at least €50,000. For the other modelos, 172 and 173, they must be presented by those companies that participate in cryptocurrencies, such as exchange agencies, services to safeguard cryptographic keys, maintain or distribute virtual currencies and coin creators.

According to the Treasury, this model must reflect the user’s personal data, tax identification number, address, and telephone number. In addition to this, they add that they must fill out fields such as the company name in the case of being a company that provides services related to virtual currencies.

When does Modelo 721 come into force?

These new developments are already in force from the day following their publication in the “BOE” – Official State Gazette and will be applicable for the first time to modelo 721, “Informative declaration on virtual currencies located abroad”, corresponding to the year 2023, which will be filed between January 1 and March 31, 2024.

Fines and penalties

The sanctions for not submitting Modelo 721 will be the same as for Modelo 720. That is, fines of €300 for not submitting it if the Administration requires it, and €150 for submitting it incorrectly. Likewise, they can fine €20 for undeclared/required registration or €10 for doing it wrong. In addition to a 4-year statute of limitations, 5 for tax crimes and 10 for aggravated tax crimes.

Although, keep in mind that you can always count on a 50% reduction for payment in the voluntary period!

If you need help filing the Modelo 720 or the Modelo 721, please do not hesitate to contact us. US Tax Consultants info@ustaxconsultants.es Phone +34 915 194 392