What Is Modelo 720?

Why it matters

Most Digital Nomad Visa holders from the U.S. arrive in Spain with substantial foreign assets: U.S. bank accounts, brokerage accounts, 401(k)s, IRAs, stock holdings, or property. Once you become a Spanish tax resident — typically after 183+ days in Spain in a calendar year — all of these become potentially reportable under Modelo 720.

Missing this filing in year one is the most common compliance mistake made by Americans who move to Spain without specialist advice. The form is not widely known in the U.S., and standard U.S. expat tax preparers do not always flag it. Your Spanish gestor or a dual-qualified U.S./Spain tax advisor will raise it as a year-one obligation.

What triggers Modelo 720

The obligation arises when you are a Spanish tax resident and you hold, in any of the following categories, assets exceeding €50,000:

• Bank accounts and deposits: Foreign bank accounts, savings accounts, money market accounts — individually, if the average quarterly balance or year-end balance exceeds €50,000
• Securities, rights, insurance, and income: Foreign brokerage accounts, ETFs, stocks, bonds, mutual funds, life insurance policies with cash value, annuities held at foreign institutions — if the total value exceeds €50,000
• Real estate: Foreign property — if the acquisition value exceeds €50,000

Each category is evaluated independently. You can own foreign property worth €40,000, foreign bank accounts worth €40,000, and foreign securities worth €40,000 — and if no single category exceeds €50,000, you may not need to file. But if any one category crosses the threshold, you report everything in that category.

U.S. retirement accounts: a specific issue

The treatment of U.S. 401(k)s and IRAs under Modelo 720 has been contested. Spain originally required their disclosure. The European Court of Justice ruling in 2022 and subsequent Spanish reform affected the penalty regime but not the disclosure requirement itself. U.S. retirement accounts held at U.S. custodians are technically foreign securities from Spain's perspective and fall under Category 2 (securities held at foreign institutions).

If your 401(k) or IRA balance exceeds €50,000 — which it likely does for most mid-career U.S. professionals — you are potentially required to declare it. A specialist who understands both U.S. and Spanish tax law is essential here; the interaction between the U.S.-Spain Tax Treaty and Modelo 720 reporting is not straightforward.

Filing details

• Deadline: January 1–March 31 each year, covering the prior calendar year
• Filed with: The AEAT via the Sede Electrónica (online portal), using your digital certificate or through your gestor
• Initial vs. subsequent filings: The first filing is a full declaration. Subsequent filings are only required when asset values change by more than €20,000 in any category, or when assets are acquired or disposed of
• Tax effect: Modelo 720 is informational — it does not create a tax payment obligation by itself. It is a disclosure form. Taxes owed on income from foreign assets are reported separately on Modelo 100 (IRPF)

Common mistakes

• Not realizing the obligation exists. This is the most common issue for Americans in Spain. FBAR is well-known; Modelo 720 is not. Budget for a specialist review in year one.
• Applying the FBAR $10,000 threshold to Modelo 720. The thresholds are different: €50,000 per category for Modelo 720. These are not the same form.
• Treating it as optional because "Spain will never know." The Common Reporting Standard (CRS) and FATCA mean Spain's AEAT routinely receives financial account information from U.S. and global institutions. Undisclosed foreign assets are not as invisible as they once were.