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Spain: Sanctions for failure to report assets held abroad

Spain: Sanctions, failure to report assets held abroad

The European Commission today announced it has decided to refer Spain to the Court of Justice of the European Union (CJEU) for imposing disproportionate penalties on Spanish taxpayers for the failure to report assets held in other EU and EEA States ("Modelo 720").


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As explained in the EC release, Spain requires resident taxpayers to submit information on the assets they hold abroad. This includes properties, bank accounts, and financial assets. The failure to submit this information timely and in full is subject to sanctions that are higher than those for similar infringements in a purely domestic situation and that may even exceed the value of assets held abroad. The EC considers that these sanctions for incorrect or late compliance are disproportionate and discriminatory, and may deter businesses and private individuals from investing or moving across borders. These provisions conflict with the fundamental freedoms in the EU.

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