Reporting a foreign retirement account: asset declaration versus income tax

Key rules

• Two questions: Declaring an account and paying tax on its income are decided separately.
• Locked pensions: Pension schemes where you cannot freely withdraw are generally not reportable.
• Open accounts: Accounts you can freely withdraw from or manage are more often reportable.
• Refiling: After the first filing, you file again only if a category rises by more than €20,000.

How each account type is treated has changed over time, so confirm yours with the Agencia Tributaria or a tax adviser before filing or skipping.

Two separate questions

Declaring an account and being taxed on its income are different things. A pension account can be exempt from one and still be caught by the other. Answer each question on its own, account by account.

Do you have to declare the account on Modelo 720?

Modelo 720 is the yearly declaration of assets held abroad. It applies when a category is worth more than €50,000. The categories are bank accounts, securities and insurance, and real estate. You file it between 1 January and 31 March for the previous year.

Whether a retirement account counts depends on the type of account:

• Locked pension schemes. If you cannot freely take out the money, the tax authority has generally treated the account as not reportable. It is not an ordinary account or investment.
• Schemes with insurance features. These are treated differently from ordinary investment accounts.
• Accounts you can withdraw from or manage freely. Some IRAs fall here. These are more often treated as reportable.

The tax authority's view has changed over time, so do not assume. Check each account by type, then add up the reportable ones in their category to see whether you pass €50,000.

Is the income taxed in Spain?

This is a separate matter. Not having to declare an account on Modelo 720 does not make its income tax-free. Being declared on Modelo 720 does not make it taxable either. As a Spanish tax resident, you should check separately how Spain treats contributions, growth and withdrawals for each plan. A tax adviser can do this for your accounts.

If you do have to file

After your first filing, you only file again if the value of a category has risen by more than €20,000. Penalties were softened after a 2022 court ruling and rule change, so standard penalties now apply to late or missing filings. The timeline and questions below cover the steps and what happens if you file late.

Timeline and deadlines

• Check whether each foreign account counts as an asset to declare, separately from whether its income is taxed: Before the filing window opens

• File again only if a category's value has risen by more than €20,000: In a later year, during the same 1 January to 31 March window

Frequently asked questions

Does a foreign pension account have to be declared on Modelo 720?

Not always: pensions where you cannot freely dispose of the funds are generally not reportable on Modelo 720, but accounts you can freely withdraw from or manage, such as some IRAs, are more often reportable. Pension schemes with insurance features are treated differently from ordinary investment accounts. Each account type needs its own check.

What happens if I file Modelo 720 late or not at all?

The standard penalties now apply, not the heavy ones struck down in 2022. After a January 2022 EU court ruling, Spain changed the rules so unreported assets no longer automatically count as unjustified capital gains with no time limit. Ask the tax agency before filing late.

Do I have to file Modelo 720 again every year?

No, once you have filed, you only file again if the value of a category rises by more than €20,000. The first declaration covers the previous year and is filed between 1 January and 31 March.