Modelo 720 March Deadline 2025: Your Essential Guide
Living in Spain as a tax resident comes with certain obligations, and one key task is the Modelo 720 declaration. If you’re new to Spain or still getting to grips with its tax system, this annual filing can seem daunting. Don’t worry, this article will break it down for you. The deadline for Modelo 720 is 31st March each year, and it’s a requirement for reporting foreign assets worth over €50,000. Whether you’re a long-term resident or just settling in, understanding this form is crucial to staying compliant and avoiding penalties. Let’s dive into what you need to know and how you can make the process smoother.
What Is Modelo 720 and Who Needs to File?
The Modelo 720, is a declaration that Spanish tax residents must submit alongside their income and wealth tax returns. It’s not a tax itself but a way for the Spanish tax authorities to keep track of assets you hold outside Spain. If the total value of your foreign assets in any one category exceeds €50,000, you’re required to file.
Here’s a quick rundown of who needs to submit:
- Tax residents in the previous year: If you were a resident of Spain for tax purposes last year, this applies to you.
- New residents: If you’ve recently moved to Spain, you might need to file for the first time.
- Long-term residents: You’re likely familiar with the process but may only need to report changes this year.
Not sure if you’re a tax resident? You are if:
- You spent over 183 days in Spain in a calendar year,
- Your main interests (e.g., home, business or job) are based in Spain.
There’s no “split-year” rule in Spain—you’re either a resident for the full tax year or not. If you meet any of these criteria, it’s time to check your foreign assets.
What Assets Do You Need to Declare?
The Modelo 720 focuses on three main categories of assets held outside Spain. You only need to report a category if its total value exceeds €50,000 as of 31 December 2023. Here’s what’s included:
- Bank accounts: Declare the year-end balance and the average balance for the last three months.
- Investments: This covers Investment accounts, stocks, bonds, or ETF/Mutual Funds — convert values to euros using the official exchange rate.
- Immovable property: Holiday homes or rental properties outside of Spain.
A few key points to remember:
- Jointly owned assets? Each owner declares the full value, noting their ownership percentage.
- Trusts or companies? If you’re an owner, settlor, beneficiary, or have disposal rights, those assets count too.
- Only report changes if you’ve filed before—more on that below.
This isn’t about paying extra tax—it’s about transparency. But it’s also a great chance to review whether your assets are structured efficiently for Spanish tax rules.
Submitted Last Year? Here’s When to File Again
If you’ve submitted a Modelo 720 in previous years, you don’t need to file every time unless something’s changed. For your 2024 declaration (due by 31 March 2025), report only if:
- An existing asset’s value increased by more than €20,000,
- You sold an asset or closed an account, or
- You acquired new assets worth over €50,000 in a category.
For first-timers, you’ll need to declare everything that meets the threshold as of 31 December. The form can be submitted online, so make sure you’ve got all your figures ready before the deadline.
Penalties for Getting It Wrong
Spain used to impose eye-watering fines for Modelo 720 mistakes, but a 2022 European Court of Justice ruling forced a rethink. The penalties are now more reasonable, though still worth avoiding:
- Basic fine: €20 per missing or incorrect data point, with a minimum of €300 and a max of €20,000.
- Late but proactive filing: Penalties drop by 50% if you submit before the tax authorities notice.
- Assets outside the EU: Fines double if the undeclared assets are held beyond EU borders.
Plus, there’s now a four-year statute of limitations, so older errors are exempt from enforcement… Still, accuracy matters—late or sloppy filings can cost you.
An Opportunity to Optimise Your Tax Position
Submitting the Modelo 720 isn’t just about compliance—it’s an opportunity to rethink your finances. Many expats in Spain hold investments designed for their home country tax rules, which can mean paying more tax in Spain than necessary. Are your assets in the right structures? Could you simplify your affairs? Reviewing this now could save you money and hassle down the line.
How to Get It Right
For the detailed process of submitting Modelo 720, your tax accountant is the best person to consult. However, if you’re looking to make Spain a more tax-efficient place to live, I can assist. With our expertise in cross-border tax and wealth management, we can help you:
- Utilise compliant tax planning structures to reduce your tax burden and ensure peace of mind,
- Assess your assets to confirm they’re structured optimally for Spanish tax regulations,
- Streamline your financial affairs—many clients discover that restructuring simplifies completing Modelo 720 significantly.
We specialise in helping clients thrive financially as Spanish residents. Using compliant tax planning structures, we can reduce your tax burden and bring you peace of mind. We’ll review your assets to ensure they’re structured optimally for Spanish rules, often making tax season a much simpler process. Ready to transform your tax position? Get in touch today to explore how we can support you.
