Thomas is German, has lived in Valencia since 2023 and holds a share portfolio with a Frankfurt broker worth around 120,000 euros. In March 2026 he filed his first Modelo 720, the Spanish return that reports assets held abroad, and when he reached the end of the form he looked for the box with the amount to pay so that he could ask his bank for an NRC (the payment reference code a Spanish bank issues when you pay a tax). He did not find it. It is not a fault in the program: the 720 is not paid.
It is an information return. You file it, you get a receipt with its secure verification code and that is the end of it. No tax due, no payment slip, no direct debit. What can cost money lies around the 720, and it is worth knowing how each thing is paid so as not to mix them up.
Three payments that get confused with the 720
Anyone searching for how to pay Modelo 720 is usually thinking, without knowing it, of one of these three things:
- The IRPF on the income from those assets. The dividends, interest and gains your assets abroad generate go in your income tax return, Modelo 100. That one is paid.
- A penalty for filing the 720 late. It arrives as an assessment, with its own payment document and its own deadlines.
- The invoice from whoever prepares it for you. That is a professional fee, not a tax. Nobody in the tax administration charges for receiving a 720, and if someone asks you to pay a "720 fee", it is not Hacienda.
| What you pay | With which document | Ways to pay |
|---|---|---|
| Nothing for the 720 itself | Filing receipt | — |
| IRPF on dividends, interest and sales | Modelo 100 | NRC, direct debit, payment in two instalments (60% and 40%) or deferral |
| Penalty for late filing | Assessment with payment letter | NRC with the assessment reference, debit to your account or deferral |
| Cryptocurrency abroad | Modelo 721, also an information return | Not paid either |
What Thomas really ends up paying: his German dividends
Thomas's shares paid him 4,000 euros gross in dividends in 2025. Germany withheld 26.375% at source (the 25% of its capital income tax plus the solidarity surcharge): 1,055 euros. In Spain, as a resident, Thomas is taxed on his worldwide income. Step by step:
- The 4,000 euros go into the savings base. If he has no other savings income, it all falls in the first band, at 19%: 760 euros of Spanish tax.
- The tax paid in Germany is deducted from that amount, but not all of it: only up to the limit set by the Spain–Germany tax treaty for dividends of private investors, 15%. That is, 600 euros.
- Thomas pays 760 euros − 600 euros = 160 euros in his Spanish IRPF.
- The difference withheld in excess in Germany, 1,055 euros − 600 euros = 455 euros, is not refunded by Spain. It is claimed from the German tax administration through its own procedure, and a good many people never do it.
Those 160 euros are paid like any other IRPF result. The exact limit in your treaty is always checked in its text: 15% is common, not universal.
The ways of paying IRPF, applied to someone with assets abroad
The result of Modelo 100 can be paid by direct debit until a few days before the end of the filing campaign, by NRC obtained from your bank or through the payment gateway of the electronic office, or split interest-free into two instalments: 60% on filing and 40% in the autumn. If the amount is large, you can also ask for a deferral, with no guarantee required up to 50,000 euros under Order HFP/311/2023.
A practical detail for residents who have just arrived: the NRC and direct debit require an account with a Spanish collaborating bank. If you still earn and save abroad, it pays to have the Spanish account open before April, not to find out in June.
If you want us to review the 720 and the income tax return together, which is how they should be looked at, the Modelo 720 form asks you only for what is needed to tell you what applies to you.
When what has to be paid is a 720 penalty
If you filed the 720 late, the usual course is that months later a proposed penalty arrives, followed by the decision imposing it. That decision comes with its payment document carrying its own reference, and it is paid by NRC quoting that reference or from the electronic office in the section for paying assessments.
The deadline is set by article 62.2 of the Ley General Tributaria (the General Tax Act): if the notification arrives between the 1st and the 15th of the month, until the 20th of the following month; if it arrives between the 16th and the last day, until the 5th of the second following month. Paying within that deadline and not appealing reduces the penalty by 40%. With the reduced minimum penalty for a 720 filed without a prior request, 150 euros, that leaves the payment at 90 euros.
If you decide to appeal the penalty, collection is automatically suspended while the appeal is decided, with no need to provide a guarantee; what you lose is the reduction for prompt payment. It is a decision about numbers: with small penalties it is almost never worth appealing; with large penalties and good arguments, sometimes it is. How those reductions are built is in the penalty and its reductions.
We have seen emails and calls asking foreign residents to "regularise their 720" by transferring money to an account. Hacienda does not collect by transfer to private accounts or ask for payments over the phone: every payment is linked to a form or an assessment with its reference, and it can be checked in your personal area of the electronic office before you pay.
What nobody explains when you pay for the first time
The deduction for international double taxation is not applied by itself: it has to be entered in the IRPF return with the country, the income and the tax paid abroad, and you must keep the broker's certificate proving the withholding. Without that document, in a review the deduction is lost and tax becomes due.
The assets you report in the 720 and the income you declare in IRPF have to match. A 720 showing 120,000 euros in shares and an income tax return without a single euro of foreign dividends is exactly the kind of inconsistency that triggers a letter. Declaring your income properly is, in practice, the best way to "pay" the 720.
Nothing is paid either when you update the 720 because a block rises by more than 20,000 euros or you close an account: it is another information return, on the same form and with no payment. What there may be at that moment is income. If you closed the foreign account to bring the money to Spain, the transfer is not taxed; if you sold funds or shares to do it, the gain goes in that year's IRPF and is paid by the routes we have seen.
And there is a calendar worth keeping in view. The 720 is filed between January and March; IRPF, between April and June. The sensible thing is to prepare both at the same time with the same certificates from the foreign bank and broker: the balance at 31 December for the 720, the year's income and withholdings for IRPF. People who prepare them separately usually ask twice for the same papers and, worse still, end up with figures that do not match between the two.
And if your assets abroad include shares in your employer or RSUs held with a foreign broker, the calculation has extra layers that we explain in equity and Modelo 720.
What people ask us about paying Modelo 720
Can I set up a direct debit for Modelo 720 on the last day of the deadline?
No. With Modelo 720, as with the rest, direct debit closes several days before the deadline ends, and that margin is not negotiable. Anyone who finds out on the last day can only pay another way, and if there is no time left the debt enters the enforcement period with its surcharge. It is one of the most avoidable mistakes we see.
Do I have to file it every year?
No. Once filed, you only report again if a block rises by more than 20,000 euros compared with the last return, or if something is closed or transferred. But it has to be checked every year.