Declaration for Tax as a RESIDENT of SPAIN

I strongly advise you to fill in modelo 720 if advised to do so. The fines for not doing so can be much  more than the taxes to be paid. 

Steve 

G’day Steve, 

Fair advise tebo53, thank you for your insight on this matter.

Yes, we are fiscal residents. Yes we completed the modelo 720.

If you want the sunshine you have to pay the taxes. 

You can always return home to the rain.

Tax evasion increases the burden for tax payers.

Just off of the back of this - we moved over here late July 2020 and so do not become tax resident until this year when we will have completed the requisite number of days in Spain.

I've been contacted by our tax advisors to complete the modelo 720 by end of Q1 this year - is that right given we are only tax residents from this tax year?

TIA.  

We gained our Residencias in August 2018. 

We became liable for income tax on 1/1/19.

We did our modelo 720 in Feb 2020.

We submitted our income tax returns for Jan-Dec 2019 in June 2020

We paid our Jan-Dec 2019 income tax in 2 chunks ... June and November 2020.

So, if your experience matches ours, your modelo 720/income tax process won't be until 2022.

FYI ... we are still paying PAYE in the UK as well, and have not yet recovered our UK-paid income tax from 1/1/19 onward - so there is a hefty cash flow pinch point to plan for.   

Thanks for that I'll follow up with my advisor.

Hi MORF,

I'm fiscally resident in Spain and, as others have said, not complying with Spanish tax law could end up being far more costly.

The Modelo 720 is a declaration of your worldwide assets - it's for information purposes only and has to be presented during the first quarter (1 January to 31 March) in the year after you first become tax resident in Spain.  The form is divided into three different groups:

• Group 1: accounts held abroad where the total balance of all the accounts exceeds €50,000 (balance is not divided between the holders).
• Group 2: private and works pensions, annuities, investments, shares, bonds, life insurances and other assets held abroad exceeding €50,000 in value.
• Group 3: property or business premises abroad with a purchase value of €50,000 or more.

Once you've completed your first Modelo 720 (assuming that you have sufficient assets to warrant doing so), you only have to submit another if:

• There has been an alteration in your circumstances.
• Your assets have increased by €20,000 or more of total assets in any of the groups previously declared.
• Your assets have increased in value to €50,000 or more in a new group not previously declared.

If you're a UK citizen, it's also worth noting that ISA savings, which are tax-free in the UK, are not tax-free in Spain.

Kind regards,
Kim

"I would prefer not to pay this country Spain -  anymore tax - as they already have taxed me enough.

What you 'prefer' is irrelevant, you live in Spain so you obey the laws of Spain, if you find that unpalatable then you know what to do.

BTW as far as the Spanish tax man is concerned 'residency' in Spain begins when you sign on a padron not when you receive your residencia.

Hi Kelvin1960, thank you for your post, I am exactly the same as you, but gaining residency August 2020, I paid non residence tax for year ending 2019 = December 2020, Any idea what type of tax/taxes I should have to pay for tax year 2020 = non resident up to August 2020 and thereafter a resident = what tax for that 4 month period? reading your post I am liable for resident tax from the 1/1/21 and then February 2022 submit a 720, then submit tax returns for January to December 2021 in June 2022 paying in 2 chunks in June and November 2022, I hope I am correct in reading your post, very helpful, but what to do for the year 2020 as mentioned? thank you, stay safe and healthy my friend.