Why is the best time to make the regularisation now, before the regulation becomes final?
Last January, the Court of Justice of the European Union ruled that both Form 720, where assets and rights located abroad are declared, and the penalty system derived from it, were contrary to EU law, as they impose an excessive burden on citizens and establish restrictions on the free movement of capital.
Now, the Spanish Tax Agency has taken advantage of the Senate’s processing of the amendment to the Corporate Income Tax Act and the revised text of the Non-Resident Income Tax Act to introduce a series of amendments to bring the declaration of assets and rights abroad into line with the CJEU ruling.
In the meantime, we believe that for taxpayers who have not filed their tax return on time, it would be a good time to do so, from the publication of the ruling until the new one is approved, for the following reasons:
- They will have to regularise the unjustified gain by imputing it to the last non-prescribed tax period (IRPF 2017) but without the application of the 150% penalty.
In addition, they will not have to pay for the unjustified capital gain if they can prove that the property or right was acquired in a prescribed period, i.e. acquired more than 4 years ago.
- They will only have to regularise Personal Income Tax, Wealth Tax and Corporation Tax for the last non-prescribed tax periods for the income from the assets in question.
- There is no fixed penalty of €100 per item of information, with a minimum of €1,500. They could apply the fixed penalties regulated by the General Tax Law of €100 (Art. 198.2) but the special prevails over the general so, in principle, this penalty would not be activated.
At MDG Asesores we are at the disposal of all our clients who wish to regularise their situation, studying each specific case and analysing all possible avenues.