Modelo 720 used to be the most punitive informational filing in the EU. A single forgotten foreign account could generate a €5,000-per-item penalty floor and an asset-value-based fine of 150% — frequently producing penalties that exceeded the underlying assets themselves. The CJEU killed that regime in January 2022 and Spain rewrote it via Ley 5/2022. The form remains mandatory; the penalties are now proportionate. Most expat advisors still describe the old version, and most US, UK, and German residents arriving in Marbella still fear-skip the filing on out-of-date guidance. The current regime is manageable. The current regime is also still mandatory — and missing it is exactly the kind of trail AEAT now uses to anchor a deeper audit.
Modelo 720 (Declaración informativa sobre bienes y derechos situados en el extranjero) is governed by Real Decreto 1558/2012 and reformed by Ley 5/2022 of 9 March following CJEU ruling C-788/19 (27 January 2022). It applies to Spanish tax residents only — anyone spending 183+ days in Spain in a calendar year, or whose centre of economic interests is Spain. Filed annually by 31 March for the prior year's position. Three asset categories trigger filing if any one of them crosses €50,000 in aggregate: (1) foreign bank accounts, (2) foreign securities, equity, life insurance, annuities, (3) foreign real estate. Once filed, you only re-file in subsequent years if any single category increases by more than €20,000 or if you stop owning a previously declared asset. Post-2022 penalties: €150 per omitted item plus a percentage-based proportionality cap aligned to the actual tax due — a major softening from the pre-2022 regime that imposed €5,000-per-item floors and 150% asset-value penalties.
Modelo 720 was created by Ley 7/2012 to support Spain's anti-fraud agenda after the 2008 crisis. The original penalty architecture was deliberately punitive: omitting a single foreign account triggered a €5,000-per-item fine (minimum €10,000), the omitted asset was treated as unjustified capital gain taxable at the top marginal rate (47%) regardless of when it was acquired, plus a 150% surcharge on the resulting tax. Cumulatively, a forgotten £100,000 UK ISA could generate >€200,000 in penalties.
The European Commission opened infringement proceedings in 2017. The CJEU ruled in C-788/19 (Comisión v Reino de España) that the regime violated EU law on three counts:
1. The treatment of omitted foreign assets as unjustified capital gain without a statute of limitations was disproportionate. 2. The €5,000-per-item floor was disproportionate. 3. The 150% surcharge was disproportionate.
Spain enacted Ley 5/2022 of 9 March to comply. The post-2022 regime:
The practical penalty for a clean late-filer in 2026: typically €150-€600 in administrative fine, no capital-gain assessment, no top-rate tax. The regime is now in line with FBAR (US) and CRS (international) reporting standards.
Each category is independent. Crossing the threshold in any one of them triggers the filing for that category. Crossing the threshold in two triggers filing for two. The €50,000 is per category aggregate, not per asset.