Spanish regulation regarding assets abroad is contrary to EU law

Víctor de Castro Esteller

The judgement issued by the Court of Justice of the European Union on January 27th 2022 states that Spanish regulation of Form 720 is contrary to the European law because the following issues violate the free movement of capitals:

  1. The assets that had not been declared, declared incorrectly or after the deadline were considered unjustified capital gains without time limitation.
  2. The penalty for unfulfillment were 150% of the tax liability calculated in accordance with the point 1.
  3. Additional fines of 5.000€ per missing or incorrect data, with a minimum of 10.000€.

Note that the taxpayers who paid said disproportionate fines in the past can claim the refund based on the commented judgement.

The Form 720 is a Tax Form that residents in Spain should submit to report overseas assets and rights.


XLNC ARCHIVE| 05 May 2022

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