Modelo 720 Faces New Challenge from Brussels

On 15 February, the European Commission sent a reasoned opinion to Spanish government giving them two months to amend the Modelo 720 penalty regime as the current penalties are considered disproportionate.

If there is no satisfactory response within this deadline, the Commission will bring the case to the European Court of Justice in order to obtain a ruling on this issue.

According to the Commission, Spain has the right to require its taxpayers to provide information about their overseas assets, however the sanctions and penalties established by the Modelo 720 law are considered disproportionate and discriminatory, thus conflicting with the European Union freedoms. The Commission found that the penalties established for the Modelo 720 are much higher than the penalties imposed for other defaults such as late payment or late submission of Spanish income and wealth tax returns.

The European Commission has been arguing this case with Spain for the last two years after opening an infringement procedure. However, as no agreement was reached, the Commission has decided to take a step forward against the disproportionate penalties for the Modelo 720.

While sources from the Spanish government claim they are willing to defend Modelo 720, they have also hinted they may potentially soften some sanctions, such as capping the fine for errors in completing the form. They also suggested a possible reduction in penalties for failing to declare assets based in EU countries or in states that have signed automatic exchange of information agreements with Spain.

If you are Spanish resident and own overseas assets totalling over €50,000, make sure you are ready to meet the upcoming 31 March deadline for your 2016 declarations.

Souce: unnamed

For more info on Tenerife read the Red Queen Musings everyone’s favourite Tenerife Blog
Advertisements
This entry was posted in News and Views and tagged , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s