Brano77

I obtained a digital certificate when I submitted my Modelo 720. For the annual La Renta returns I have to date always used a gestor for the final submission although I download PADRE each year and complete it to the best of my understanding for comparison with the gestors result. I rent my UK house and there are always issues with the Hacienda challenging expenses claimed. In this respect using a gestor is helpful for subsequent communication with the Hacienda.
I am now tempted to use my digital certificate to enter my personal area for La Renta. It appears that once you have done this all subsequent communications are electronic. Is this correct and if so how does it work? At the moment the postman arrives and I sign for any letter from the Hacienda with 10 working days to reply. How does the electronic equivalent work?
The actual AEAT website I presume is only in Spanish? Is it user friendly? Is there any danger of causing havoc? I would be particularly interested in viewing historic correspondence and possibly in the future submitting my own replies to questions they may ask.

cricketman

Yes you can do the forms yourself electronically as long as you know what you doing, and speak very good Spanish

In 8 years we have only had hacienda query something once. They called up and asked for a document. When we couldnt provide it they said that we would have to make an amendment to the tax form, but there was no fine or anything

I am very surprised that hacienda query your tax form on a yearly basis. They dont have that much resource!

Brano77

We live in the very NW of Galicia where expats are few and far between. Perhaps we are a novelty to the local tax office and seen as good sport! All the requests for further information are related to the rental income from our UK house. For example, demonstrating that I own the house 100%, that the rental contract is long term, that the mortgage interest is on a mortgage for the rental property - on the surface not a problem but the devils in the detail and the language. I am never fined, merely have to pay interest on "late" payment on any sums claimed as expenses they do not accept. Everthing I claim is justified but proving some of it to their satisfaction seems an up hill stuggle and possibly not worth the effort. It´s become a sport for us if we choose to play!

cricketman

I am in Asturias. There are just a handful of British people here, and not expats as such, usually young single people teaching English

I see, yes it would have been an unusual case for them which needed a lot of documents to prove. We dont have a house in the UK so are just declaring our work as autonomos and savings interest

Now that you have started to declare you should not simply stop. I assume you have filled in modelo 720 for your UK house? Otherwise you could be in big trouble, and even bigger trouble if you stop declaring but remain as residents. The fines they can hand out are enormous

Brano77

We have been very British and done things by the book. Yes, completed Modelo 720 for the UK house. However, it was a struggle to get our first tax returns sent as local gestors and the bank manager encouraged us to keep quiet - they will never know you have a UK house - you must be loco. We also had the " If you earn less than 22K € you need not declare scenario. Should we be proud to be good citizens or are we just afraid of being caught?

cricketman

You should be proud, and anyway, they are getting tougher and tougher and doing more checks

My sister-in-law is a corporate tax lawyer in Barcelona and two years ago she advised us all to get our taxes and assets into shape as hacienda have all the systems in place now to check whoever they want

Their first tax fraud campaign started two years ago aimed at celebrities, sportstars and politicians. It has caught 100s of high profile people, some who have paid massive fines, others are in prison now. Next they will be targeting business mediaum and large, and after that they will be coming for everyone else....apparently

Brano77

The last time we saw our gestor he said that over the last two years the hacienda has been sending queries to people for sums as small as 50€. These are individuals who have completed returns for years and never been questioned. They do not bother to contest these matters as it costs more to do so than pay the tax. The gestor believes it´s an intentional strategy to increase their revenue! Regarding Modelo 720 I have never heard of anyone being taken to task over it. If they do in time come after people, pàrticularly expats I will have a lot of sympathy for a large percentage of them because they will have had bad tax advice from "professionals" with no intention of avoiding tax in the first place.

cricketman

We are only in the 2nd year of modelo 720. The 3rd year of declaration is due by the end of this month

The theory is that if your assets have increased by more than 10% from the previous year, and you did not declare them on your income tax return, then they will fine you, very heavily - they will take 47% of the increase as tax as well as a 10k fine per piece of missing info.

The other check they have with modelo 720 is a cross check against the details which the banks must share with national governments. Again if they find anything not declared then they will take 47% as tax and fine you 10k per missing account/property etc

The consequencies if they actually catch you and apply the law would be absolutely devastating

Fred James

Not quite correct - it's even worse than that.


The fine for each item not declared is €5000 with a minimum fine of €10000. In addition the value of the asset will be considered as income and taxed at the normal income tax rates of up to 50% or more in some regions. In addition there will be a fine of 150% of the tax due and if the tax due is over €120000 it will be considered a criminal offence.

Brano77

Not sure how this works with property or to be precise a UK house. From recollection the value to be entered when Modelo 720 was first introduced was the purchase price assuming it cost more than 50k. My recollection may not be very good!

Neptuno

I heard that you only had to resubmit if your assets in each category had gone up by more than 20k in each of the categories.
I've not heard of the 10 % increase before; having to resubmit if your 50 k has gone up by 5k is ridiculous .
I ve also heard that in its first year only 5% actually submitted the 720, though how they could know that I don't know.
Instead of penalising someone who has complied with the law but may have made an innocent mistake, with draconian penalties, how about tracking down the apparently vast numbers who refuse to declare hidden assets?
By the way, what happened to the petition to the EU , protesting about disproportionate fines?
One thing to watch for: due to the exchange rate, those assets in sterling which were below the level when converted to euros may well be over now!

cricketman

Yes even worse then

Meaning that if you have a 100k in a bank acount that you did not declare on the first form 2 years ago then they would take 47% as tax, and then fine you another 63%.

Meaning that they will take all your money and ask for another 10k for the pleasure

No wonder people have been leaving the country over this!

jonboy

When you finish, please pass me the razor blade!