Do you have to file Modelo 720 every year?

Once Modelo 720 has been filed for the first time, a familiar question follows: does the return have to be repeated every year for as long as assets are held abroad?

Not necessarily. The duty to file again depends on how each block of assets evolves, and on certain transactions carried out during the year.

For later returns, the Spanish Tax Agency sets a rule: a joint increase of more than EUR 20,000 compared with the amount that determined the last declaration of the block concerned. Transfers, closures and other losses of the previously declared status must also be reviewed.

The EUR 50,000 and EUR 20,000 thresholds serve different purposes

The initial EUR 50,000 threshold is used to assess whether a block must be reported for the first time, together with its other requirements and exceptions.

Once that block has been declared, the rule of an increase above EUR 20,000 governs later filings.

They are not interchangeable thresholds. Nor does it mean that, after the first return, any new asset worth more than EUR 20,000 must be reported in isolation: the relevant set and the transactions carried out have to be analysed.

Each block is reviewed separately

Modelo 720 brings together three reporting duties:

A new duty in one block does not, by itself, require the other two to be repeated.

In addition, if you have never declared a block, its initial conditions must be checked. Having filed for bank accounts before does not mean that a first return for property is automatically governed by the EUR 20,000 threshold.

Which year is the increase compared with?

The reference is the last year declared for the block, which may not be the previous year.

Take this simplified example for the joint balance at 31 December:

In 2026 the increase compared with 2023 exceeds EUR 20,000. Comparing it only with 2025 would lead to the wrong conclusion.

This example assumes there were no other grounds for filing and that the other relevant figures have already been checked.

For accounts, also review the average balance of the last quarter

Comparing the balances at 31 December is not enough.

In the accounts block, both the joint balance at the year end and the joint average balance of the last quarter must be checked against the corresponding references in the last declaration.

The required increase may be exceeded in one of those figures without being exceeded in the other. Where that requires a further filing, the set of accounts subject to the duty is reported, not only the account whose balance has increased.

Sales and closures: a duty can arise without any increase in wealth

A fall in wealth does not automatically rule out a filing.

The changes to review include:

• The closure of an account previously subject to reporting.
• The revocation of a bank authorisation that was declared.
• The transfer of assets or rights previously subject to reporting.

The Spanish Tax Agency confirms, for example, that the revocation of an authorisation over a declared account must be reported, stating the date and the balance at the time it ceased. It also covers the closure of a declared account even where its balance has fallen below EUR 50,000.

What if the asset never had to be declared?

The position is different where there was never a duty to report that asset, not even in the year of its closure or extinction.

The Spanish Tax Agency states that, in that case, the closure does not by itself create the duty to declare it. A distinction must be drawn between never having been under a duty and having been under one without filing.

What if I sell investments and reinvest the money?

Transactions in securities have particularities that rule out a general “if I reinvest, I do not report” approach.

The Spanish Tax Agency accepts that, where the conditions for full reinvestment in other reportable securities are met, reporting each cancellation individually may be replaced by declaring the balances at 31 December.

That information may be required even where the set has not increased by more than EUR 20,000. It is therefore worth reviewing the whole portfolio movement and keeping the evidence of sales, purchases and commissions.

Do exchange-rate movements matter?

Yes, they can matter even if you have not put in new money.

For accounts and other assets denominated in a foreign currency, conversion into euros can change the joint value that has to be compared.

For ownership of property there is a particularity: according to the Spanish Tax Agency, once the acquisition value has been determined and declared, later exchange-rate movements are not taken into account in deciding whether there is a joint increase above EUR 20,000 requiring those properties to be reported again.

When is a later return filed?

The general period remains 1 January to 31 March of the year following the year to which the information relates.

So if changes during 2026 create a new duty, the filing would fall, under the rules in force, in the period from 1 January to 31 March 2027.

How to organise the annual review

Even if you ultimately do not have to file, a check at the close of each year is worthwhile.

Prepare a folder containing:

• The last return filed for each block.
• The figures used as the reference.
• Bank and investment certificates for the current year.
• Documentation for new acquisitions.
• Evidence of sales, closures and revocations.
• Currency conversion calculations.
• Information on changes in your tax position.

With that documentation the analysis can follow a clear order: identify changes, compare figures block by block, review the transactions that require reporting, and record the outcome.

Keep a note of the calculation where no filing is due. It will help the following year and avoids losing the reference of the last declaration.

Frequently asked questions

Must I file if the increase is exactly EUR 20,000?

The increase rule requires it to be more than EUR 20,000. Reaching exactly that figure does not, by itself, trigger that ground for filing. The other circumstances must still be checked.

Can a portfolio rise without new contributions and still create a duty?

Yes. The check looks at the value calculated under the applicable rules, not only at the money contributed. Valuations and, where relevant, currency conversion can have an effect.

Must an account opened and closed within the same year always be reported?

No. The Spanish Tax Agency accepts that accounts opened and closed within the same year need not be reported in that case. It should not be confused with closing an account that was already subject to reporting in earlier years.

Does reviewing an earlier return mean filing a new one?

Not necessarily. Checking the duties of a later year and correcting errors in a return already filed are different exercises. It is worth identifying first which year and which information need review.

Check your duties before filing again

Modelo 720 requires the assets and rights declared to be monitored. An annual review makes it possible to tell apart keeping an investment, exceeding a relevant increase and carrying out a transaction that must be reported.

At MH Legal & Seguros we can help you review your position and coordinate the tax advice you need, with service in your language and offices in Dénia, Gandía and Villalonga.

Contact our team at info@mhlegalyseguros.com to discuss your case.