Sofie and Marc are Belgian and have lived in Alicante since 2022. They have a joint account in Belgium with 70,000 euros, 50% each. Marc still owns the house in Ghent that he bought in 2004 for 140,000 euros. And Sofie is listed as an authorised signatory on her mother's account in Antwerp, which holds about 90,000 euros, so that she can pay her bills. They both wonder whether they have to file Modelo 720. The answer is that they both do, and for more reasons than they thought.
The 720 requires Spanish tax residents to report the assets and rights they hold abroad when these exceed certain thresholds. Nothing is paid for filing it, but you have to get right who is obliged and why, because this is where most mistakes are made.
The first question is not what you own abroad, but where you are resident
Only someone who is tax resident in Spain at 31 December of the year being reported files the 720. You are resident if you spend more than 183 days of the year in Spain, if the main core of your activities or economic interests is here, or if your spouse, not legally separated, and your dependent minor children live in Spain, unless proven otherwise. These are the criteria of article 9 of the IRPF Law (the Spanish personal income tax act).
Someone with dual residence, because another country also considers them resident, applies the tie-breaker rules of the tax treaty. If that is your case, the 720 depends on how it is resolved, and we deal with it in the dual residence conflict.
There is an important exception: anyone taxed under the article 93 regime, the so-called Beckham regime, does not file the 720 while they remain in it, even though they are resident.
The three blocks and the 50,000 euro threshold
The 720 groups assets into three blocks, each with its own threshold of 50,000 euros. Exceeding just one obliges you to report that block, not the others. The full explanation of each is in the three blocks of the 720; here it is applied to the family in Alicante.
| Block | What there is | Value that counts | Over 50,000 euros? | Who reports |
|---|---|---|---|---|
| Accounts (key C) | Joint account in Belgium | 70,000 euros (the total, not half) | Yes | Sofie and Marc, each with their 50% |
| Accounts (key C) | Mother's account, Sofie authorised | 90,000 euros | Yes | Sofie, as authorised signatory |
| Real estate (key B) | House in Ghent | 140,000 euros (acquisition value) | Yes | Marc |
| Securities, funds and insurance (V, I, S) | Nothing | 0 euros | No | Nobody |
Three things in this table come as a surprise. The first is that the threshold is measured against the total value of the account, not against your percentage: two holders of a 70,000 euro account both report. The second is that being an authorised signatory creates the obligation just as being the holder does, even though the money is not yours; so does being a beneficiary, attorney or beneficial owner. The third is that the property is reported at what it cost, not at what it is worth today.
Check your obligation in six questions
- Were you tax resident in Spain at 31 December? If not, there is no 720.
- Are you under the article 93 regime? If you are, you do not file it.
- Are you listed on any foreign account as holder, authorised signatory, attorney or beneficiary? Add them all up: if the balance at 31 December or the average balance for the last quarter exceeds 50,000 euros, you report the accounts block.
- Do you have shares, holdings, funds, life insurance or annuities taken out or deposited abroad? If their total exceeds 50,000 euros, you report that block. Your company's shares held with a foreign broker count.
- Do you have property or rights over property abroad, including timeshares or usufructs? If their acquisition value exceeds 50,000 euros, you report that block.
- Have you already filed in some year? Then you only file again if a block rises by more than 20,000 euros over what you last reported or if you close or transfer something.
If you answer yes to questions 3, 4 or 5 and you are not sure how to value what you own, the Modelo 720 form is designed for exactly that: with four pieces of information we know whether you are obliged and which blocks to report.
Next year: the 20,000 euro rule
Suppose Sofie and Marc file the 720 for 2025 in March 2026. In 2026 the joint account goes from 70,000 euros to 84,000 euros and Sofie's mother's account falls to 85,000 euros. Do they have to file again in March 2027?
- For Marc, his accounts block rises from 70,000 euros to 84,000 euros: 14,000 euros more. It does not reach 20,000 euros, so he does not file for that block. The house has not changed. Marc does not file.
- For Sofie, her accounts block is the sum of the two: it goes from 160,000 euros to 169,000 euros. It rises by 9,000 euros. She does not file either.
- If Sofie's mother closed her account and removed her as authorised signatory, Sofie would have to file: closing a reported asset creates an obligation to report, even if the block goes down.
That comparison is made each year against what was last reported, not against the previous year. That is why you must keep a copy of every 720 you file. The borderline cases, such as accounts that are closed and reopened at another bank, are in when the 720 has to be filed again.
Many residents are listed as authorised signatories on their parents' account in their home country to help them with payments. That authorisation obliges you to report the whole account if it exceeds the threshold, even though not a single euro is yours. If you do not want that obligation, the solution is not to stop reporting: it is to check with the bank whether the authorisation is still needed, and to do so before 31 December.
What stays out of the 720, and what does not
Assets located in Spain do not go in the 720, even if they are at a foreign bank with a Spanish branch and the account was opened at that branch. Nor does cryptocurrency held by foreign platforms: it has its own information return, Modelo 721, which works with similar rules and is explained in Modelo 721.
What does go in, and almost nobody expects it, is life insurance taken out with foreign insurers, life or temporary annuities received from abroad and rights over property that fall short of full ownership. And it makes no difference that the country is in the European Union: Belgium creates the obligation just like any other.
The year of arrival deserves its own check. If you moved to Spain in September, the usual position is that you are not resident that year, because you do not reach 183 days and your centre of interests is still abroad, and you have no 720 until the following year. But if you arrived in March, or if your spouse and children were already living here from January, you can be resident from the first year and owe the 720 for that same December. It is one of the dates most often miscalculated.
Filing without being obliged is not an offence, but it is not a good idea to do it just in case. The reasonable thing is to go through the six questions every January, with the December statements in front of you, and decide on the basis of data. How each record is filled in, once decided, is explained in how Modelo 720 is filled in.
Two doubts that come up about the obligation to file Modelo 720
What if I file Modelo 720 without being obliged to?
Filing more than you have to is not an offence, but it is not free either: it binds you to what you reported and, if there is a mistake, it has to be corrected. With Modelo 720 the sensible thing is to check the obligation first, and not to file just in case. The thresholds on this page are there precisely for that.
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.