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Date Published: 28/01/2022

ARCHIVED - EU rules Spanish declaration of assets abroad is illegal

ARCHIVED ARTICLE

The Treasury in Spain will have to return more than 2 million euros to taxpayers

<span style='color:#780948'>ARCHIVED</span> - EU rules Spanish declaration of assets abroad is illegal

The Court of Justice of the European Union declared on Thursday January 27 that the system of sanctions which the Spanish Treasury applies to taxpayers who fail to correctly declare their property and assets abroad is illegal, ruling that it is a “disproportionate” measure that contravenes EU law.

The familiar model 720 requires all foreign assets valued at more than 50,000 euros be declared in Spain, but back in 2015 the European Commission filed against Spain, claiming that demanding that resident taxpayers notify the Treasury of foreign properties and bank accounts threatens the free movement of capital across the European Union. When a resolution was not forthcoming, Brussels brought the case before the European Justice in June 2019.

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The EC argued that it was unfair to impose such controls on people when the Spanish Tax Agency can easily access all the information it needs thanks to the transparency within the EU. The Court agreed, and declared Spain’s regulations illegal.

Now, the Minister of Finance has estimated some 60,000 taxpayers who annually file the 720 declaration will have to be reimbursed for fines which have been handed down. In the grand scheme of things, the government considers the two millions euros owed to be “a limited volume”, and the minister has insisted that in the past three years, hardly any sanctions have been issued.

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