Since its implementation in 2013, form 720 has been a subject of controversy due to the obligation to declare assets and rights abroad. Law 7/2012 introduced additional provisions in the General Tax Law, establishing a strict penalty regime for those who did not comply with this obligation.
However, recent resolutions from the Court of Justice of the European Union (CJEU) and the Supreme Court have questioned the legality of this regime and set significant precedents. The CJEU issued a judgment on January 27, 2022 (case C-788/19) stating that both the penalty regime and the consideration of unjustified gains under Model 720 were contrary to European Union law.
Based on this judgment, the Supreme Court ruled the nullity of regularizations based on gains not derived from transactions and the imposed penalties, considering them contrary to European Union law.
In this context, relevant news has emerged: The Ministry of Finance and Public Function has started to favorably resolve cases of full nullity of penalties imposed by the State Tax Administration Agency on taxpayers who did not file the corresponding declarations using form 720.
This acceptance by the Ministry of Finance of the nullity of penalties imposed due to the non-filing or incorrect filing of form 720 represents a significant recognition of the illegality of the imposed penalties, providing affected taxpayers with the opportunity to initiate a full nullity procedure for such penalties, which is of great importance for those affected by form 720 penalties.
Procedures for review and full nullity declaration in the tax field are known for their high complexity and require a deep understanding of tax legislation and European Union regulations. In this regard, having specialized advice is essential to ensure the chances of success in the procedure.
At addwill, we have experts in Tax Procedures and individual and High Net Worth Individuals’ taxation, who can play a key role in defending the interests of taxpayers in such procedures and provide the necessary support in this kind of process.