Álvaro Méndez is an engineer, lives in Zaragoza, is 41 and in April 2026 is moving to Zurich on a permanent contract. His wife and daughter are going with him. Outside Spain he has an account in Luxembourg with 70,000 € and a portfolio of funds with an Irish broker worth 110,000 €, which he declared on his 720 for 2024. Before packing his bags he asks: "If I no longer live in Spain, can I forget about the 720? And do I have to declare the closure of the Luxembourg account if I close it from Switzerland?" It depends on which year we are talking about, and the year of the move is the trickiest.
The obligation follows your residence in each tax year
Under articles 42 bis, 42 ter and 54 bis of the Reglamento General de Gestión e Inspección (Royal Decree 1065/2007, the regulations on tax management and inspection), Modelo 720, the Spanish return on assets held abroad, is filed by individuals resident in Spanish territory. The Agencia Tributaria, the Spanish tax agency, specifies in its frequently asked questions that the residence that matters is that of the tax year to which the return relates, not the residence at the time it is filed.
Three simple rules follow from that:
- if you were resident in year X, you file the 720 for year X between January and March of year X+1, even if by then you already live abroad;
- if you were not resident in year X, there is no 720 for year X;
- residence for IRPF (Spanish personal income tax) purposes is determined by the full calendar year: there is no such thing as half a year resident and half a year non-resident.
How residence is decided in the year of the move
Article 9 of the Spanish income tax act treats as resident anyone who, in the calendar year, spends more than 183 days in Spain, or has the main centre or base of their activities or economic interests here. It also presumes residence when the spouse from whom the person is not legally separated and the dependent minor children habitually live in Spain. Sporadic absences are counted as time spent in Spain unless tax residence in another country is proved.
With Álvaro's details:
| Test | 2026 | Reading |
|---|---|---|
| Days in Spain | About 100 (January to mid-April) | Does not exceed 183 |
| Centre of economic interests | New job and home in Zurich; the portfolio stays where it was | Needs analysing with the full facts |
| Spouse and daughter | They move with him | The family presumption does not apply |
| Swiss residence certificate | He requests it from the Swiss authorities | A key piece of evidence |
If, taking all of that into account, Álvaro is non-resident in 2026, he does not file a 720 for 2026, and whatever he does with the Luxembourg account after he leaves creates no Spanish reporting obligation. If, on the other hand, the circumstances meant he remained resident in 2026, he would have to file the 720 for 2026 in the first quarter of 2027 from Zurich, including any closure during that year.
How Switzerland treats Álvaro in the year of the move is for his Swiss adviser to confirm; we look only at the Spanish side and, if both countries considered him resident, the tax treaty between the two states would resolve the conflict. The guide on the dual residence conflict explains how.
The last 720 before leaving
2025 raises no doubts: Álvaro was resident for the whole year. His accounts block stays at 70,000 €, with no relevant increase on what he declared in 2024, and his portfolio has gone from 110,000 € to 134,000 €. That is where the trap lies:
- value of the portfolio declared on the 720 for 2024: 110,000 €;
- value on 31 December 2025: 134,000 €;
- increase: 24,000 €, more than 20,000 €;
- conclusion: he files the 720 for 2025 for the securities block before 31 March 2026, just before moving.
This filing is easily forgotten in the middle of a move. If he had also sold funds or closed accounts already declared during 2025, those transactions would have to be included as well.
Ceasing to be resident does not cancel the obligations for the years in which you were. A 720 that was missed in 2023 or 2024 is still outstanding even if you have left, and Hacienda, as the Spanish tax office is commonly known, can check it until it becomes time-barred. Before you go, it is wise to bring any overdue years up to date.
If you are preparing a move and want to close off your Spanish obligations properly, in the Modelo 720 form you can tell us your planned departure date and what you declared in earlier years.
Cases in which you remain obliged
There are situations in which, even though you live abroad, you are still taxed in Spain on all your income and, according to the Agency's criteria, you remain obliged to file the 720:
| Situation | Legal basis | 720? |
|---|---|---|
| Diplomatic or consular staff, or Spanish civil servants posted abroad | Art. 10 LIRPF | Yes, according to the Agency |
| A Spanish national who moves to a country treated as a tax haven | Art. 8.2 LIRPF: keeps taxpayer status in the year of the change and the following four | Best treated as obliged while that status lasts |
| A resident who leaves but remains resident through the centre of interests | Art. 9 LIRPF | Yes |
The second row calls for caution: the law keeps IRPF taxpayer status in those years, and the Agency links the 720 to taxpayers who are taxed on their worldwide income. Which countries have that status today has to be checked against the list in force at the time of the move.
The Impuesto sobre el Patrimonio (Spanish wealth tax) is a separate question: article 5 of that law allows someone who ceases to be resident to opt to keep paying tax under personal liability, and anyone who does not do so is taxed under real liability only on what is located in Spain. It is a decision taken with the first return after departure.
When you come back
The Agency sums up the return like this: if in one year you were outside the scope of the obligation and in the next you are within it, you file the 720 for the year in which you are resident again, if you exceed the thresholds. If Álvaro comes back in 2030 and is resident that year, in March 2031 he will check the three blocks with the values for 2030.
Which reference to use for the 20,000 € rule after years abroad is not expressly settled in the Regulations. Our approach is to file a complete return in the first year back in which the thresholds are exceeded, rather than relying on a 720 filed a decade earlier. And if the return takes place under the regime in article 93 of the Spanish income tax act, that taxpayer is not obliged to file the 720 while the regime lasts, although their spouse or children may be if they are resident and not under the regime.
For those who become resident part-way through a year, the full-year reasoning is set out in what happens if I become resident mid-year?. And if the move involves substantial shareholdings, it is worth reviewing the guide on exit tax when changing residence first.
Departures and returns are times when the obligations of two countries pile up; at Salama Tax we describe how we close the last 720 before departure and how we prepare the first one on return.