Spain Changes Tax Model 720, Used to Declare Cryptocurrency Holdings Abroad – Regulation Bitcoin News
The Spanish parliament has introduced an amendment to the tax model 720 used to declare cryptocurrency and other assets abroad, softening some of the penalties associated with it. The amendment, which has yet to be approved, alters some of the toughest penalties that were ruled illegal by the EU Court of Justice last month.
New Model 720 in Parliament
A Tax Model 720 amendment, which required taxpayers to disclose crypto and other types of assets held outside the country, was introduced in the Spanish Parliament on 10 February. The anti-fraud law that was approved last June stipulates that foreign cryptocurrencies should be declared according to this model.
The proposed change is intended to eliminate some penalties in the previous model 720 that were declared illegal by the Court of Justice of the European Union last month. Under the old structure, debtors could pay up to 150% of their assets abroad depending on the circumstances. In addition, taxpayers had to pay fines of 5,000 euros ($5,675) for providing inaccurate, false or incomplete data in the digital currency tax declaration. These tax debts never became statute-barred, which meant that even after years debtors had to pay the accumulated debt.
The amendment for the new 720 model includes fixes for these items. One of the most significant changes is that tax debts now become four-year statute-barred, meaning that taxpayers will only be liable for debts from the last four tax periods. Another of the important changes that are proposed is the modification of the fines that will be imposed on taxpayers. Of the aforementioned fines, the new penalties are in line with what the current general tax law describes, ranging from 150 to 250 euros.
In addition, the established penalties of 150% disappear, which the Court of Justice of the European Union had described as giving the 720 model an “extremely repressive character”. However, some things are maintained. Taxpayers have an obligation to declare the cryptocurrency assets they hold abroad, and citizens who hide these assets abroad will have to pay fines.
This “soft” model 720 will be used to declare these taxes before March, the closing date of the tax declaration period. It is not known if the government will maintain this model for the future or if it will design a new model for next year.
What do you think of the new tax model 720 and its relaxed penalties? Tell us in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons