New 720 Form – Spanish Tax Authority.
The Court Decision of the European Court of Justice will open the door to recover some taxes and fines paid to the Spanish Tax Authority by individuals regarding the 720 Tax Form.
If you have been required by the Spanish Government to fill out the 720 Tax Form , the following information might be of interest to you.
720 Form is the informative declaration of assets and rights located abroad that must be filed with the Tax Authorities by residents in Spain who meet a number of specific conditions.
What should you know after the judgement of the European Court of Justice (ECJ) agains 720 Form?
The ECJ has ruled against the Spanish state and its 720 Form of declaration of the assets and rights located abroad, because it was causing a discriminatory treatment between the Spanish residents (Spanish or Foreigners) by the mere fact of owning assets located outside Spain, as well as limiting the free movement of capital in the territory of the European Economic Community (EEC) .
Has Form 720 disappeared?
NO . After this Judgment, the obligation to declare assets and rights held abroad (real estate, boats, current accounts, financial assets, cryptocurrencies, etc.) r emains in force , but the worst consequences of the previous regulation have been eliminated . In particular, the strong regime of penalties has been softened. Previously, it used to cause fines that were higher than the value of the undeclared assets.
What happens to taxpayers who have already been penalized for not declaring, or misdeclaring, their assets abroad in the old 720 Form?
Initially they will be able to appeal and request the refund of the amounts of taxes paid and the penalties incurred , from the Spanish Tax authorities, if they are in any of the following cases:
1.- The taxpayer appealed against the decision of the Spanish Tax Authorities and the procedure is ongoing.
2.- The taxpayer appealed against the decision of the Spanish Tax Authorities and lost, but four years have not passed since the rejection of the decision.
3.- The taxpayer paid and did not appeal, but four years have not passed since the date of the sanctioning resolution (which was not appealed).
At this point, there is an important opportunity to recover the amounts that were unfairly paid . However, as this is a complex legal situation, it is necessary to study each application on a case-by-case basis to determine the chances of success of each claim.
720 Form continues to be mandatory for those who are residents in Spain, have assets abroad and meet a series of conditions . Because of that, every case has to be studied to see if the form 720 has to be filed.
In case you have any doubt about the 720 Form and your eligibility to get a compensation or a tax return , do not hesitate to contact Alfons Esteve from the Legal Department of Evolution at legal@evolutionagents.com .
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