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EU court strikes down Spain’s order to disclose foreign assets to taxman

Martin Everson

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Jan 2, 2018
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Good news for some especially crypto holders. Seems the tax hell called Spain went too far and got their wrist slapped by EU.

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The European Court of Justice on Thursday (27 January) struck down a regulation in Spain that forces residents to disclose all their foreign assets to the tax service under the threat of heavy fines.

The Luxembourg-based court said the rule violated the free movement of capital within the European Union, arguing that it discriminated between assets abroad and in Spain, and that the fines imposed on those who didn’t declare their foreign assets were disproportionate.

Spain’s tax service was taxing undisclosed assets as if they were revenues and imposed hefty fines, with such payments often exceeding the value of the assets, said Rafael Garcia Millan, a tax lawyer and partner at Cremades and Calvo Sotelo firm.

The court also said the absence of a statute of limitations created legal uncertainty.

The disclosure form, known as Modelo 720, was “a headache” for thousands of foreigners residing in Spain with more than 50,000 euros worth of assets abroad, the legal limit, Garcia Millan said.

The ruling, which cannot be appealed by Spain, effectively halts current investigations of people suspected of failing to disclose assets and would allow those who have already paid fines to demand refunds, he added.

Budget Minister Maria Jesus Montero said the government had been working on correcting the rule for several months and would apply a new version as soon as possible. She added the tax agency had suspended its investigations into ‘Modelo 720’ violations while the ECJ was examining the case.

She said the government had received a total 230 million euros ($256.34 million) in fines under the regulation.



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I had the same view and thought it was a general rule that one should state everything one had, no matter where in the world. But maybe it's the fines that are in violation of EU regulations?
 
Hoping out Spanish language friends on here could update us.
Hey, what's become illegal are the fines imposed and all other consequences derived from not filling the 720 or filling it wrong, as of right now, you still need to file the 720 but as the fines are illegal, if you don't do it you wouldn't face any kind of fines.

They also have to return all the fines imposed, doesn't matter if they were disputed in the past and the taxman won, all of them need to be reimbursed even if those affected don't sue the taxman.

Huge win thanks to this lawyer
 
They also have to return all the fines imposed, doesn't matter if they were disputed in the past and the taxman won, all of them need to be reimbursed even if those affected don't sue the taxman.

Thats good news then....for now.
 
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Thats good news then....for now.
Just an update.

To summarize, the Spanish tax agency has ignored what EU said and they're taking down all the claims being filled asking for the fines to be returned because they state that the tax agency's work is to make sure taxes are paid according to current law and it's not their duty to judge the proportionality o legality of the laws approved by the legislative power.
 
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T
Just an update.

To summarize, the Spanish tax agency has ignored what EU said and they're taking down all the claims being filled asking for the fines to be returned because they state that the tax agency's work is to make sure taxes are paid according to current law and it's not their duty to judge the proportionality o legality of the laws approved by the legislative power.
The Spanish taxman is absolutely correct in his assessment: The EU and EU courts can say a lot. As long as the national government does not accept/approve/write into national law what the EU or a EU court ruled, it can be ignored by any lower institution. A lower institution (e.g. tax authorities of a country) is only bound by what the next higher instance tells/orders them.
In short: This is a failure of the Spanish government which did not adopt the new EU ruling into national law.

They might (perhaps) stop issuing new fines. However, for the old fines to be returned it first requires action by Spanish lawmakers.
 
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