In simple terms, the Modelo 720 form is a declaration of overseas assets, that Spanish tax residents are obliged to fill out. If you do not declare these assets to Hacienda, the Spanish tax authorities, you may receive a fine of anywhere between €100 to €10,000. You may also be penalised for a late submission of the Modelo 720, so it is important to know exactly what it is, when to fill it in, and how to submit it.
The Modelo 720 applies to all legal and physical Spanish residents who own assets outside of the country of a value greater than €50,000. This includes: real estate, or profits derived from real estate, overseas bank accounts, and balances, insurance, income, and taxes hailing from abroad.
To submit the form, you must download and submit it electronically, as there is no option to do so in person. In terms of the time frame, you must declare these assets between January 1 and March 31 of the subsequent year for which the information was reported. For example, if you hold relevant assets in 2019, you must submit your Modelo 720 before March 31 2020.
Start informing yourself about what details you need to fill in the form early on to avoid missing the deadline, if Spanish is not your first language you may have some trouble filling this in. Give yourself plenty of time to avoid any penalties. The Modelo 720 is in no way related to tax collection, it is a merely informative form which Hacienda demands. It should be noted that the EU considers Spain to be infringing EU law by imposing penalties for late submissions of the Modelo 720. The penalties will still apply; however, the EU Commission is currently debating the legality of these fines.