Unjustified increase in wealth

Undeclared assets abroad and Tax Form 720

Unjustified increase in wealth

One of the headaches of the Tax Agency in recent months is the processing of the appeal filed on 23 October 2019 before the Court of Justice of the European Union (CJEU) against the Spanish Tax Administration for the well-known form 720.

The rule appealed is the informative declaration of assets abroad (obligation that is completed through the 720 form) and its severe penalty regime, which presumes the existence of “unjustified increase in wealth” of such properties or property rights located abroad that have not been declared by taxpayers.

The Court has to rule on whether the penalty regime (with penalties of up to 150%) is disproportionate, and whether the non-limitation of this type of presumed income is incompatible with the freedom of capital movements.

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Undeclared assets abroad and Form 720

At the same time, the Supreme Court is about to rule on several appeals on the penalty regime, so it is essential to be attentive to the outcome of both procedures.

If you have assets abroad and you have not complied with your obligation to declare them, you should rely on professional tax advice to avoid incurring unnecessary risks. If you need help, we can help you.

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