Model 720 in Spain: foreign assets, reporting duties and what still scares expats
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"Updated to include CJEU ruling C-788/19 of 27 January 2022 and amendments to the penalty regime."
Modelo 720 is a mandatory annual declaration for any Spanish tax resident holding foreign assets worth more than €50,000 per category. Bank accounts abroad, life insurance policies, property back home: everything must be declared. The initial penalties were among the harshest in Europe — the CJEU partially struck them down in 2022. But the form remains mandatory, and forgetting to file still carries a steep price.
1. Why this form triggers so much anxiety
Modelo 720 has a history that largely explains the panic it generates. Created in 2012 under Ley 7/2012 as an anti-tax fraud measure, it initially provided for penalties that had no equivalent anywhere else in the EU: 150% of undeclared assets, with no statute of limitations. A Spanish resident with €200,000 sitting in an undeclared foreign bank account was theoretically facing a €300,000 fine.
These penalties triggered capital flight, a wave of legal challenges, and ultimately a case before the Court of Justice of the European Union.
"The system established by the Kingdom of Spain for the declaration of assets and rights held abroad is incompatible with EU law in so far as it provides that failure to comply with or late compliance with the obligation to provide information [...] is treated as an unjustified capital gain."
CJEU, Ruling C-788/19 of 27 January 2022 — Commission v. Spain
The ruling struck down the most confiscatory aspects of the regime. But the form itself remains mandatory, standard penalties remain significant, and many expats — particularly recent arrivals — have no idea they are affected.
Le conseil terrain d'Amory
I have met expats — Belgians, Dutch, Germans — who had been living in Tarragona for two years and had never heard of Modelo 720. Their gestor had not mentioned it, either assuming they held no significant foreign assets, or simply overlooking it. That is precisely the scenario that leads to costly regularisations three or four years down the line.
2. Who is affected and what must be declared
The 3 asset categories to declare
Bank accounts (Grupo A)
Threshold: €50,000All bank accounts held abroad: current accounts, savings accounts, ISA-type products, and investment accounts. The reference value is the balance at 31 December or the average balance for the final quarter of the year, whichever is higher. A Wise account with a Belgian or European IBAN, an N26 account with a German IBAN, or a Revolut account with a Lithuanian IBAN all fall into this category if the balance or quarterly average exceeds €50,000.
Securities and insurance (Grupo B)
Threshold: €50,000Shares, bonds, investment funds, company holdings, pension rights, and life insurance policies. Whole-life and endowment policies held abroad are particularly relevant here: if the surrender value of your policy exceeds €50,000, it must be declared. EU occupational pension schemes and private pension vehicles — Belgian EIP/PLCI contracts, Dutch pension funds, German Riester or Rürup plans, British SIPPs — are also covered if their capitalised value exceeds the threshold.
Real estate and real rights (Grupo C)
Threshold: €50,000Any foreign real estate of which you are the owner, bare owner, or usufructuary. A family home in Belgium, a flat in the Netherlands, an inherited property in Germany, a buy-to-let in the UK — any foreign real estate right is covered. Reference value: acquisition cost or declared value (not current market value).
The €50,000 threshold applies per category, not to your total foreign assets. If you hold €45,000 in a foreign bank account (category A) and €45,000 in surrender value on a foreign life insurance policy (category B), you are technically not required to file Modelo 720 — no single category exceeds the threshold. But if your bank account reaches €52,000, category A is breached and the declaration becomes mandatory for that category alone.
3. Penalties after the CJEU ruling: what has changed
Ruling C-788/19 of 27 January 2022 forced Spain to reform its penalty regime. Ley 5/2022 aligned Spanish law accordingly. Here is the current state of sanctions:
| Situation | Penalty before 2022 | Penalty after 2022 reform |
|---|---|---|
| Non-filing discovered by Hacienda | 150% of assets + formal penalties | Standard formal penalties only (€5,000/data item, min. €10,000) |
| Late filing without prior Hacienda request | Formal penalty + 150% | €100/missing data item (min. €1,500) |
| Incorrect or incomplete data | Formal penalty | €200/incorrect data item (min. €1,500) |
| Tax statute of limitations | None (imprescriptible) | Standard 4-year limitation period reinstated |
The invalidation of confiscatory penalties does not make Modelo 720 a formality. Standard formal penalties (minimum €5,000 per missing data item if audited) remain significant for most profiles. And Hacienda retains the right to use Modelo 720 data to verify the consistency of your IRPF declarations — a discrepancy between your declared foreign assets and your declared income can trigger a full tax audit.
4. The filing procedure
Modelo 720 is filed exclusively online through the Sede Electrónica de la Agencia Tributaria, between 1 January and 31 March of the year following the reference year. For assets held at 31 December 2025, the declaration must be filed before 31 March 2026.
- Inventory all your foreign assets at the start of the year
Bank account statements (balance at 31 December plus Q4 average), surrender value of foreign life insurance policies at 31 December, acquisition cost of foreign real estate. Gather these documents from January onwards to avoid being caught out in March.
- Identify which categories exceed €50,000
Apply the per-category rule. If your foreign bank account exceeds the threshold, category A is in scope. If your life insurance policy exceeds the threshold, category B is in scope. If your foreign property has an acquisition cost above €50,000, category C is in scope. Each category is assessed independently.
- Mandate your gestor before 15 February
Your gestor needs time to gather data, prepare the form, and review it before submission. Do not send the documents on 28 March expecting a clean filing by the 31st.
- Retain all supporting documents for at least 4 years
Bank statements, insurance policy valuation certificates, foreign property deeds or notarial records. The tax statute of limitations is 4 years — during this window, Hacienda can request supporting evidence at any point.
5. Specific situations for Northern European expats
✓ Common foreign assets and how they are treated under Modelo 720
- Current and savings accounts (ING, HSBC, BNP, Belfius, Lloyds, ABN AMRO, Deutsche Bank, etc.): if the balance at 31 December or the Q4 average exceeds €50,000, it must be declared under category A. A practical option: reduce the balance below the threshold before 31 December if there is no legal obligation to retain the funds.
- Whole-life and endowment insurance policies (AG Insurance, Generali, Allianz, NN Group, Ethias, etc.): the surrender value at 31 December is the reference figure. If it exceeds €50,000, mandatory declaration under category B. Whether to keep or surrender this policy after relocating to Spain is a separate question — see the dedicated article on foreign life insurance as a Spanish resident.
- Pension savings and occupational pension schemes (Belgian EIP/PLCI, Dutch pension funds, German Riester/Rürup, British SIPP/SSAS): these fall under category B. The reference value is the account or policy value at 31 December.
- Family property in your home country: if you have sold it, no issue. If you retain it — rented out, occupied by family — it falls under category C at its acquisition cost. For inherited property, the value declared in the foreign probate or succession process serves as the reference.
- EU-listed securities and investment funds held in a foreign brokerage account (Euronext, LSE, Xetra, Euronext Amsterdam): category B. ETFs domiciled in Luxembourg or Ireland but held in a foreign account also fall into this category if the total exceeds €50,000.
6. Voluntary regularisation: how to proceed
If you have never filed Modelo 720 since arriving in Spain and you are affected, voluntary regularisation is always preferable to waiting for a Hacienda audit.
Ley 5/2022, de 22 de marzo — Modificación del régimen sancionador del Modelo 720
The regularisation procedure: your gestor files the missing Modelo 720 declarations for each concerned year (within the 4-year statute of limitations), with payment of reduced late-filing penalties. When regularisation is initiated voluntarily before any Hacienda request, penalties are significantly lower than those applied during a formal audit.
Further reading
Frequently asked questions
If I hold a joint account abroad with my partner, do we each declare 50%?
Does my Wise or Revolut account with a foreign IBAN need to be declared?
Can Hacienda obtain foreign banking information directly?
Modelo 720 rules changed significantly following the 2022 CJEU ruling and may continue to evolve. This article reflects the regulations in force as of 22 March 2026. Do not take any regularisation or omission decision without consulting a licensed gestor who will analyse your individual situation.
Amory Dumoulin
Creative Developer & Belgian Expat — Altafulla, Tarragona
"Modelo 720 was one of the first obligations I had to get my head around after moving to Catalonia. This guide is based on official legal texts and the CJEU ruling — not expat forum threads where half the information is two years out of date."
You hold foreign assets and live in Spain?
Your gestor should analyse your Modelo 720 situation as part of your first IRPF declaration. I can point you towards English-speaking gestors in Tarragona who regularly handle expat files from across Northern Europe.
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