“Although in principle these measures could be appropriate to achieve the objectives pursued, which are the prevention and the fight against evasion and tax fraud, resulting in a disproportionate”. With these words the European Commission describes the system around which revolves the controversial model 720 —which forces taxpayers to declare assets worth over € 50,000 that are on the outside— and justifies his decision to take Spain to the Court of Justice of the European Union (CJEU). The standard, which since its entry into force in 2013 has allowed it to flourish more than 150,000 million euros on goods and rights abroad, it has also raised more than one ampule for your hard penalty regime.
According to the latest data available, the Tax Agency has penalized some 5,000 taxpayers from the implementation of this model are informative, most of them in 2015 and declare it out of time. The system provides for fines very bulky and it has caused a strong number of lawsuits in the courts.
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The Spanish have more accounts in Switzerland and more homes in France the Treasury’s sanction to 5,000 taxpayers for not declaring the goods abroad, or to do it later Brussels takes Spain to the european court for tax penalties “disproportionate”
The case of Manuel Molina is one of the most emblematic. After starting the declaration of assets abroad, this retiree of Granada reported to the Treasury that had about 340.000 euros in Switzerland. The result was and still is news: the Tax Agency claimed 442.000 euros, 100,000 more than stated.
Molina committed a double fault in the eyes of the Tax Agency: declared out of time and your heritage came from a sale made more than 20 years ago and never notified the tax office. He ended up so tangled in the mechanism of the model 720, which the Treasury pulled out of the hat when the crisis was hitting hard as a promising anti-fraud measure. Then, the Ministry was headed by Cristóbal Montoro, and the coffers of the State, they needed sustenance. So much so that in 2012, the minister of the PP also announced the third tax amnesty in the history of democracy, overturned five years later by the Constitutional Court.
“The appeal of the Commission’s published is very important,” said Alexander Field, a lawyer, from DMS Consulting. “And what good is attacking all the controversial points of the standard”. The lawyer explains that taxpayers who miss the deadline of the declaration or for that matter the Treasury is given a formal sanction for each piece of data is not declared —taxpayers must report all checking accounts, securities, rights, insurance and annuities, real estate and other real rights—. The assets in question are considered as capital gains are not justified and attributed to the last year not prescribed —four years in the case of obligations with Hacienda—, in addition to seen a penalty equivalent to 150% of the quota of personal income TAX to pay, unless the taxpayer proves that you got when you lived abroad or come from income declared in Spain.
for The Field stresses that, in addition to sanctions, one of the most controversial aspects is that it removes legal security to the system, do not contemplate the ordinary rules of prescription.
The Commission had already opened a procedure of inspection in 2015 against this standard. In 2017 called to Spain that changed. Before his passivity, this summer announced that it would denounce before the CJEU.
This Monday formalized its decision with the publication of the resource in the Official Journal of the EU. He argued that the rule violates fundamental freedoms such as the free movement of workers, movement of capital and right of establishment. It’ll take two years before the verdict. Although this give the reason to the taxpayers, it will not be easy to recover the money already paid to the Treasury. Esau Alarcon, attorney-in-Gibernau Advisors, explains that they must start a new lawsuit and prove the patrimonial liability of the State for infringement of EU law. A difficult process, that Brussels also has led to the CJEU for its complexity.
the easier it will be for those who have a pending lawsuit, as Molina. After appeal the sanction, succeeded the annulment of the fine. Now your case is in the National Audience. “The standard has affected many taxpayers, but it remains unknown the extent to which it may have,” ditch Alarcón.
