Modelo 720, the Spanish information return on assets and rights held abroad, calculates nothing. It has no tax to pay, nothing is paid when you file it and there is no result box to check. It is a return made of data, and that is precisely why so many people get it wrong: each asset is a record with ten fields, and every field filled in wrongly is an incorrect item of data with a consequence of its own. This guide walks through the form block by block, in the order in which it is completed.
Block 1: who is filing and what kind of return it is
At the top go the NIF (the Spanish tax number) and the name of the declarant, the tax year the information refers to, and the type of return. That last box deserves a second look:
- Ordinary, the first one filed for that tax year.
- Supplementary, to add assets or data missing from an earlier return for the same tax year.
- Substitute, to replace it entirely when what was filed was wrong from the root.
Choosing wrongly between supplementary and substitute produces duplicates, and a duplicate on Modelo 720 is an asset declared twice that then has to be explained.
Block 2: the asset type key
Each record starts with a letter that says what is being declared. The letters are not interchangeable and they are not mixed within the same record.
| Key | What is declared under it |
|---|---|
| C | Accounts with financial institutions located abroad |
| V | Securities representing a holding in entities, the lending of capital to third parties, or contributed to legal arrangements such as trusts and fideicomisos |
| I | Shares and units in collective investment undertakings (investment funds) located abroad |
| S | Life or disability insurance and temporary or life annuities |
| B | Real estate and rights over real estate located abroad |
The usual confusion is between V and I: an investment fund does not go under V even if the broker shows it next to the shares. And a life insurance policy with a surrender value goes under neither V nor I: it has its own key.
Block 3: in what capacity you hold it
After the asset key comes the declarant's capacity in relation to that asset, and here the form is much broader than people assume. You declare as the holder, but also as a representative, an authorised person, a beneficiary, a usufructuary, a policyholder, as someone with power of disposal, or as the ultimate beneficial owner by other means.
Being listed as an authorised person on a relative's foreign account, or being the usufructuary of shares whose bare ownership belongs to someone else, obliges you to declare even though the money is not yours and even if you have never touched it. It is the situation that turns up most often when an old Modelo 720 is reviewed, almost always on accounts belonging to elderly parents. There are specific exceptions for certain authorised persons on accounts of legal entities, and it pays to check them rather than assume them.
Block 4: identifying the asset
A complete record carries the identification of the institution or the asset, its address, the country (with its code), the identification of the account or security, the date of opening or acquisition and, if applicable, the date of extinction or closure. For real estate, the address and the type of right are added.
What generates the most requests in this block is not an error of substance but of transcription: a wrongly copied IBAN, a country code that does not match the institution's address, or an opening date made up because the original could not be found. If the information is not known, you look for it in the contract or ask the institution; you do not fill it in by eye.
Block 5: the valuation, which is not the same for everything
| Asset | Amount entered |
|---|---|
| Accounts | Balance at 31 December and average balance for the last quarter |
| Listed securities | Market value on 31 December, or the average trading value for the fourth quarter: the Agencia Tributaria accepts either |
| Collective investment undertakings | Net asset value at 31 December |
| Insurance | Surrender value at 31 December |
| Temporary or life annuities | Capitalised value at 31 December |
| Real estate | Acquisition value |
Two warnings about this table. The first: accounts carry two amounts, and forgetting the average balance for the fourth quarter is the most repeated slip on the form. The second: real estate is declared at its historical cost, not at what it is worth today; a house bought thirty years ago is declared at what it cost then, converted into euros.
Amounts in another currency are converted at the exchange rate in force on 31 December. It is worth keeping the source of the rate used: if one year it is taken from one place and the next from another, variations appear that do not exist and that can trigger the obligation to file again.
Block 6: percentage and origin
Each record carries the declarant's percentage holding and an origin key showing whether the asset is a new addition, a change to something already declared or a closure.
You enter the total balance of the account or the total value of the property, and separately the percentage that belongs to you. Putting down half the balance directly because the account is held by two people is the most widespread error of judgement, and it also distorts the threshold: the €50,000 threshold is measured on the total amount, not on your share. We explain it with examples in the three blocks and the €50,000 threshold.
A practical tip for large portfolios: build the spreadsheet with all the records and their valuations first, and only afterwards transfer the data to the form. Working directly in the form means checking everything on screen, field by field, and that is where digit errors slip in. The spreadsheet also remains as the backing for the calculation, which is what you will need if it ever has to be explained.
How it is filed
Online only, with an electronic certificate or Cl@ve (the Spanish public-sector login system), between 1 January and 31 March of the year after the one being declared. For large portfolios a file with the records is generated; for three or four assets, the on-screen form is enough. When you finish, you have to download the receipt with its secure verification code and keep it together with the detail of what was declared: that document is the starting point for deciding whether you have to file again next year, as we explain in when you have to file again.
A complete record, field by field
This is how a well-built record looks for a current account and for a property, the two most common cases:
| Field | Account abroad | Property abroad |
|---|---|---|
| Asset key | C | B |
| Capacity | Holder | Holder, or whatever right applies |
| Identification | Institution, address, country and account identification | Full address, country and type of property |
| Date | Opening, and closure if there was one | Acquisition, and transfer if there was one |
| Amounts | Balance at 31 December and average balance for the last quarter | Acquisition value |
| Percentage | The ownership percentage | The ownership percentage |
When a field is missing, the form does not always stop you: it lets you file and the problem appears later. That is why we review record by record before sending, and we do not rely on the program's validation as a substitute for reading.
What to keep on the day you file
The receipt with its secure verification code, the detail of the assets declared with their valuations, the certificates from the institutions the amounts came from and the reference for the exchange rate used. Together, that is the snapshot of the tax year, and it is what lets you answer next year the only question that matters (whether you have to file again) without redoing the whole job. Whoever keeps only the receipt has half the file.
The errors we find when reviewing someone else's Modelo 720
- Declaring the percentage instead of the total balance.
- Leaving out the average balance for the last quarter.
- Using the market value of the property instead of its acquisition value.
- Putting investment funds under key V.
- Not declaring the closure of an asset that was declared at the time.
- Forgetting the account opened with a payment platform that has a foreign IBAN, because it looks like an app rather than a bank.
None of those six is a money problem: they are all data problems. And since the penalty for an information return is measured by items of data, correcting them in time and voluntarily changes the outcome a great deal. It is explained in the penalty regime today.
How we do it
We draw up the inventory by blocks, ask each institution for the certificate with the two balances or the value that applies, fix the exchange rate and build the file. Afterwards we keep the snapshot of the tax year, which is what lets us decide the following year without starting again. If you come from years without filing, we put things in order before touching anything: the order in which regularisations are made matters, and we explain it in the order for regularising several years. The Modelo 720 form asks just enough to know whether you are obliged to file and what it will cost.