Form 720

Modelo 720

Form 720

FORM 720: The European Commission is considering disciplinary action against the Kingdom of Spain for possible disproportionality in the legal configuration of the consequences of failure to comply with the obligations deriving from Form 720.

 

According to an announcement received on 15 January of this year from the AEDAF (Spanish Association of Tax Consultants), the European Commission’s Directorate-General for Taxation and Customs Union has begun infringement proceedings against our country in connection with the obligation to declare assets and rights abroad (Form 720).

These proceedings will centre on the consequences of failure to file the information return, Form 720, on time or in a complete, accurate or truthful manner. In particular, the Commission is analysing compatibility and proportionality with European Union Law in the following areas:

  • The penalty scheme of the General Tax Law and its proportionality.
  • The imprescriptibility of the government’s right to treat assets and rights not declared on time as unjustified capital gains for personal income tax (IRPF) and as undeclared income for corporate income tax.

The Commission is awaiting information which our country must submit to justify the compatibility of national regulations with community law. However, a line of defence is beginning to take shape for taxpayers in support of legal certainty for review proceedings initiated or which are to be initiated shortly by the tax administration for failure to file or incomplete, incorrect, false or inaccurate filing of Form 720. It will be necessary to abide by the final decision of the Commission, although it may be anticipated that initiating these proceedings might bring forward certain effects of other proceedings underway.

 

 

 

 

 

 

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