Modelo 720 question for first-year filers, when does the clock start?
If you are a tax resident in 2023, you have to file it in the first quarter of 2024. The 183 day rule makes you a resident for the whole calendar year. There is no grace year for the 720. Just make sure your balances on December 31 exceed the 50k threshold in any of the three categories like accounts, stocks, or property.
Are you sure about the 50k threshold being per category? I thought it was 50k total across everything you own outside Spain. I'm in the same boat in Valencia and my lawyer said it's cumulative. I really hope he's wrong because that makes it way easier to hit the limit.
The person above is right, it's 50k per group. One group is bank accounts, another is stocks and life insurance, and the third is real estate. You could have 40k in cash and 40k in stocks and not have to file anything. Just a heads up that the transition from the DNV to the actual residence card takes forever so keep your padron updated just in case AEAT asks for proof of when you moved.
Just a warning that even though the EU courts forced Spain to lower the 720 fines, they are still annoying. I missed it my first year here in 2021 and had to pay a few hundred euros. If you are on the standard DNV and not Beckham, you definitely need to report everything. Don't risk it for a form that doesn't actually cost you any tax money.
i'm also confused about the first year thing. i moved to madrid in november 2023. since i'm under the 183 days for this year, i'm assuming i don't have to file the 720 in 2024? i'll be an international tax resident for 2023 and only start the spanish tax clock in january 2024. for the op who arrived in march, you are definitely over the limit. welcome to the joys of the spanish bureaucracy. it only gets more complicated from here.
madrid gestors sometimes give weird advice on this because they assume everyone on a visa is using a lawyer for beckham law. since you aren't, you're treated just like a local. the "clock" for the 720 basically matches your first year as a tax resident. you will be filing your regular income tax (modelo 100) later in 2024, but the 720 comes first in the q1 window. don't miss that january to march deadline or you're asking for an audit.
just a heads up that there are three separate groups for the 720. one is accounts in financial institutions, one is stocks/bonds, and one is real estate. if you have over 50k in any one of those groups, you have to file. if you have 30k in bank accounts and 30k in stocks, you actually don't have to file anything because neither group hits the 50k threshold on its own. definitely verify this with a professional because the penalties for being wrong used to be insane.
you're definitely a resident for 2023. the rule is simple, if you stay 183 days or more in a calendar year you are a tax resident for the whole year. since your're not on beckham law, you have the same reporting obligations as any spaniard. you'll need the end of year balance and the average daily balance for the fourth quarter for those uk accounts. if you're married and the accounts are joint, the 50k limit applies differently. are those assets just in your name?
joint accounts are the one bright spot. if you have 80k in a joint account with a partner, you each technically own 40k. since that is under the 50k threshold for an individual, neither of you actually has to file the 720. double check that with your gestor but that's how it worked for us in malaga last year.
honestly the 720 is the main reason i actually applied for beckham law even though the flat tax rate didn't save me much money. not having to report every single cent in my accounts back home is a massive weight off my shoulders. if you haven't looked into if you qualify for beckham yet, check the dates. you usually have six months from your social security start date to apply. it might save you from the 720 headache entirely if you can still pivot.
he said he arrived in march 2023 so he's likely past the window for beckham law anyway. once you're in the general regime you are stuck with it for the duration. i'm in the same boat and just submitted my 720 info to my gestor. it's annoying but once the first one is done you only have to do it again if your assets grow by 20k or more.
i submitted mine last year and it wasn't as bad as the horror stories make it out to be. the fines were actually ruled illegal by the eu courts a couple years ago so they aren't as life-ending as they used to be, but they can still sting you for late filing. your barclays account will be easy enough but vanguard can be tricky because you have to convert everything to euros using the specific exchange rate from the bank of spain on december 31st. do not use the google rate or you'll be off by a few cents and it might trigger a flag.
if you are not on the beckham law then you are under the standard tax regime and that means you definitely have to file it in early 2024. the trigger is being a tax resident for the 2023 calendar year. since you arrived in march, you've spent way more than 183 days here. your friend is right about being exempt if he has beckham law status, but that doesn't apply to you. it's a huge pain but you need to gather those barclays and vanguard statements for the last quarter of the year.
the 183 day rule is the gold standard for hacienda. if you crossed that line in 2023, you owe them the paperwork by march 2024. be careful with the vanguard stuff because they want the valuation at the end of the year and the average balance for the last quarter. it's tedious but better than the alternatives.
does the 50k limit apply to the total of everything or is it per category? i've heard different things about bank accounts vs stocks vs property. i'm also in madrid on the dnv and i've got about 40k in savings and 20k in stocks. if they are separate categories then i might be under the limit for both. hacienda's website is a maze and i can't get a straight answer out of anyone.