The specific penalty regime and the rules on the non-applicability of any limitation period have been abolished
Following CJEU judgment of January 27, 2022, (Case C-788/19), which concluded that part of the Spanish legislation regulating the reporting obligation for assets and rights held abroad through tax form 720 is contrary to EU law (see our legal flash about this judgment), the Spanish parliament has abolished some aspects of the regulations concerned.
The recently published Law 5/2022, of March 9, modifying Law 27/2014, of November 27, on Corporate Income Tax, and Royal Legislative Decree 5/2004, of March 5, on Non-Resident Income Tax abolished the following provisions regarding the obligation to provide information concerning assets and rights held abroad:
> Provision imposing flat-rate fines for failure to submit tax form 720, for submitting it late, and for providing incorrect information (€5,000 per data item or set of data that is missing or incorrect, with a minimum of €10,000, and €100 per data item or set of data declared late without prior notice, with a minimum of €1,500).
> Provision through which the value of the assets and rights not declared or which have been declared incorrectly or after the deadline qualifies as unjustified capital gains or undeclared income, attributable to the oldest tax period among those that are not time-barred, without the possibility of benefiting from any limitation period.
> Provision imposing a fine of 150% linked to the tax resulting from unjustified capital gains or undeclared income imposed on taxpayers that fail to comply with the reporting obligations.
Since no specific sanctioning regime has been established to replace the previous one, any non-compliance with the obligation that occurs from now on shall be subject to the general penalty regime provided for in articles 198 and 199 of Law 58/2003, of December 17, the General Tax Act.
Finally, it should be noted that fines imposed under the previous regime could be challenged. It must be analyzed on a case-by-case basis.
For additional information, please contact our Knowledge and Innovation Group lawyers or your regular contact person at Cuatrecasas.