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Discussion Starter · #1 ·
One for all those who believed that the Modelo 720 was aimed at expats.

According to a full page advert from Blevins Franks in today's Sur in English, the first fine under Modelo 720 has now been imposed.

The taxpayer, a retired Spanish national, had held assets in Switzerland (shares and unit trusts) for 20 years. He never declared them on Spanish tax returns. He declared these assets voluntarily on Form 720 but submitted it 15 months late. As a consequence, an unrealised capital gain of €340,000 was imputed on his 2012 income tax return. This resulted in tax of €169,300 plus a late payment penalty and interest of €16,016. A further penalty of 150% of the tax due brought the total penalties and interest to €269,966. Therefore, the total sum of penalties was €439,266.

The taxpayer's Spanish assets, including one eighth of his home and two bank accounts have been frozen unil a final decision is reached

I still maintain that the only people who had anything to fear from the introduction of the Modelo 720 were those who had failed to declare the assets they held abroad on previous years' income tax returns, and this bears that out.

Of course, as the advert points out, the European Commission recently concluded that the Modelo 720 MAY infringe European fundamental rights, and is currently undertaking further investigations into the fines and penalties to establish if they are disproportionate.
 

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Scarey stuff Lynn.

Infact even though you worked my liability out to be zero I may actually just give them a few quid to keep on the safe side!!!

Very serious fines
 

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I haven't seen any press reports about it other than this advert.


But - seek and ye shall find.

Hacienda pone la primera multa del 150% de la cuota del IRPF por incumplir la declaraci?n de bienes en el exterior - ABC.es
It was reported in El Pais about a month ago. It seemed to me from reading the report that he didn't report in the correct year. If he had, then based on my understanding the fines would have been for a late return, and far lower. If that's the case then he was very badly advised.
 

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Ridiculous fines from a country desperately trying to rake in money by fair means or foul. What do they do, think of a number, double it and add a couple of zeros on the end for good measure?
 

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Discussion Starter · #8 ·
Ridiculous fines from a country desperately trying to rake in money by fair means or foul. What do they do, think of a number, double it and add a couple of zeros on the end for good measure?
A country which has just cut the basic rate of income tax by 5.75% (from 24.75% to 19%) and some of the higher rates of tax by even more than that. Desperately trying to rake in money by fair means or foul? I don't think so - just trying to make sure that those who would cheat the system and their fellow taxpayers are punished, and if the fines and penalties weren't draconian, we all know that those so inclined would just carry on hiding their money away and laughing up their sleeves at the rest of us.
 

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Discussion Starter · #9 ·
If this person had declared the income from his shares and unit trusts held in Switzerland for the past 20 years, and had declared the existence of these assets on the Modelo 720 within the prescribed timescale instead of 15 months late, then he would not have incurred any of these fines or penalties. Yes or no?
 

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If he had been as poor as a mugged church mouse -like me -and got Lynn to check his tax liabilities he wouldn't ever have owed a penny. Pays to be dirt poor!!
 

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Spain seems to love having ridiculously high penalties that they only occasionally enforce, so most citizens just ignore the law altogether.

The penalties in that new PP gag law are ridiculous.
The minimum penalties for making an error on the 720 are ridiculous.
Apparently there used to be a 1000+ euro fine for skateboarding in Barcelona, but you would never know it given the fact that skateboarders skate as fast as they want, wherever they want.

Spain is like the adult who is always screaming at their child who just ignores them.
 

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Discussion Starter · #12 ·
If he had been as poor as a mugged church mouse -like me -and got Lynn to check his tax liabilities he wouldn't ever have owed a penny. Pays to be dirt poor!!
Kindly desist from any further advertising - I don't intend to be inundated with similar requests!:D

If the fines and penalties didn't add up to a lot more than the amount of tax people evade by not declaring, what would be the point of having them? The idea is that they act as a deterrent, and if they don't catch everybody at least there is the risk that they will catch an individual which might make some of these thieves, because that is what they are, think twice. Spain is far from being the only country now making serious efforts to catch up with tax evaders, hence the multinational agreements now in force to end banking secrecy and automatically exchange information. I hope we read many more of these stories in the future.

7,000 such cases are under active investigation arising from Modelo 720 issues, according to Hacienda, so there is every chance that we will.
 

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It seems from this case that Modelo 720 has served its purpose....I said when it was introduced that it was for those wealthy tax dodgers drinking in the Last Chance Saloon, not British immigrants with fairly modest assets.
Let's hope thy catch a few more, those of any nationality, who suck the blood out of the rest of us by not declaring tax productive overseas assets.

Incidentally, I found these interesting figures:

Percentage of total tax revenue not collected:

Germany: 2-3%
Greece: 89.5%

Says it all.
 

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My wealth manager put all my savings into a Spanish compliant bond. They're growing tax free, and the funds he's selected are making great gains. As they are reported automatically to hacienda they don't need to be put into modelo 720. Win win win!
 

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My wealth manager put all my savings into a Spanish compliant bond. They're growing tax free, and the funds he's selected are making great gains. As they are reported automatically to hacienda they don't need to be put into modelo 720. Win win win!
Well, if your 'wealth' is invested in any kind of overseas assets and remains below the €50k threshold then there's no reporting requirement.
Income from assets is irrelevant to Modelo 720 which involves the reporting of assets not income derived from them which would and should be declared to hacienda anyay.
 

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Well, if your 'wealth' is invested in any kind of overseas assets and remains below the €50k threshold then there's no reporting requirement.
Income from assets is irrelevant to Modelo 720 which involves the reporting of assets not income derived from them which would and should be declared to hacienda anyay.


If your assets are in a Spanish compliant wrapper (bond), then they do NOT need to be declared on the 720 as Hacienda already know about them. I have this from Hacienda themselves.

The investment company themselves report any income from the bond directly to Hacienda so that the individual doesn't have to.


However, I DID report them on 720 but that's simply because I'm "belts 'n' braces" when it comes to tax etc.
 

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If your assets are in a Spanish compliant wrapper (bond), then they do NOT need to be declared on the 720 as Hacienda already know about them. I have this from Hacienda themselves.

The investment company themselves report any income from the bond directly to Hacienda so that the individual doesn't have to.


However, I DID report them on 720 but that's simply because I'm "belts 'n' braces" when it comes to tax etc.
I know...we do the same with our 'wealth'. But surely you must still declare these assets?
As you do..:)
 
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