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Modelo 720: A Practical Guide for Investors with Foreign Brokers

Everything you need to know about Spain's Modelo 720 if you invest through DEGIRO, Interactive Brokers, or another foreign broker.

April 2, 202618 min

This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax advisor for your specific situation.

If you invest from Spain using a broker like DEGIRO, Interactive Brokers, or Trade Republic, there is a tax obligation that many people do not learn about until it is too late: the Modelo 720. The name alone is enough to make some investors break into a cold sweat. And for good reason — for years, the penalties associated with this form were so disproportionate that the Court of Justice of the European Union had to step in.

But here is the good news: the Modelo 720 is not as complicated as it seems. It is an informational declaration — you do not pay anything by filing it. The tricky part is knowing when you need to file, what data you need, and how to avoid the most common mistakes.

In this guide, we will walk you through everything, step by step, without unnecessary jargon and with the perspective of someone who invests through a foreign broker from Spain. Take a breath. You are going to be fine.

What Is Modelo 720

The Modelo 720 is a mandatory informational declaration in which Spanish tax residents report to the Agencia Tributaria (Spain's tax authority) the assets and rights they hold abroad, provided those assets exceed certain thresholds.

It was introduced in 2012 by the Spanish government as a tool to combat tax fraud and capital flight. The idea, in theory, was reasonable: if you have money or assets outside Spain, the tax authority wants to know about it.

The problem was the penalties. In its original version, failing to file the Modelo 720 — or filing it late — could result in fines of up to 5,000 euros per omitted data point, with a minimum of 10,000 euros. On top of that, undeclared assets were presumed to be unjustified capital gains and were taxed at the maximum marginal rate, with no statute of limitations. That is right: there was no expiry date on the liability.

This changed in January 2022, when the Court of Justice of the European Union (CJEU) ruled that the Spanish penalty regime was disproportionate and contrary to EU law. The ruling forced Spain to reform its sanctions, which are now aligned with those of any other informational declaration. Maximum fines have been drastically reduced and the imprescriptibility clause has been eliminated.

That said, the obligation to file the Modelo 720 remains in force. What changed were the consequences of not filing, not the filing requirement itself. If you meet the criteria, you must file it.

Who Needs to File

The general rule is straightforward: you must file the Modelo 720 if you are a Spanish tax resident and you hold assets or rights abroad exceeding 50,000 euros in at least one of the three categories we will cover below.

This applies to both Spanish citizens and foreigners who are tax residents in Spain (for example, if you spend more than 183 days per year living in the country).

It is crucial to understand that the 50,000-euro threshold applies per category, not in aggregate. You could have 40,000 euros in a foreign bank account and 45,000 euros in securities at a foreign broker, and you would not be required to file anything, because neither category exceeds 50,000 euros on its own.

The Three Categories of Assets

The Modelo 720 classifies foreign assets and rights into three independent categories. Each has its own 50,000-euro threshold:

1. Bank Accounts at Foreign Financial Institutions

This category covers any current account, savings account, or deposit you hold at a bank or financial institution located outside Spain. The information you must declare includes:

An important nuance for investors: the cash balance in your brokerage account (uninvested funds sitting in DEGIRO, Interactive Brokers, etc.) can fall into this category. If your broker holds that cash in an account abroad — which is the standard arrangement — it counts as a foreign bank account.

2. Securities, Rights, Insurance, and Income Deposited or Managed Abroad

This is the category that most directly affects investors with foreign brokers. It includes:

The data you need for each asset:

3. Real Estate and Rights Over Real Estate Abroad

If you own an apartment in Portugal, a house in France, or any real estate property outside Spain, this is your category. You must declare:

For the vast majority of investors with a foreign broker, the relevant categories are the first (accounts) and the second (securities). The third only applies if you own physical real estate outside Spain.

Which Brokers Count as "Foreign"

This is where many investors get confused. The key factor is not where you operate or where you are physically located, but where the entity that holds custody of your assets is based.

Here are the most popular brokers among Spanish investors and their status:

DEGIRO

DEGIRO is a brand of flatexDEGIRO Bank AG, headquartered in Frankfurt, Germany, but the entity managing the accounts of Spanish clients is registered in the Netherlands. Your securities are held in custody by a Dutch entity. Therefore, DEGIRO counts as a foreign broker for Modelo 720 purposes.

Interactive Brokers (IBKR)

Interactive Brokers serves European clients through Interactive Brokers Ireland Limited (headquartered in Dublin, Ireland) and, for some clients, through its entity in Hungary. In either case, it is a foreign broker for Spanish residents.

Trade Republic

Trade Republic is headquartered in Berlin, Germany, and operates under a BaFin banking license. Although it has operations in Spain, the custody of your securities and your account are in Germany. It counts as a foreign broker.

Scalable Capital

Scalable Capital is another German neobroker headquartered in Munich, Germany. Trades are executed through Baader Bank, also German. It counts as a foreign broker.

What About Spanish Banks

If you invest through a Spanish bank (Santander, BBVA, CaixaBank, etc.) or a broker headquartered in Spain (such as Renta 4 or Bankinter), your assets are considered domestic even if you buy shares in foreign companies. An S&P 500 ETF purchased through Renta 4 does not trigger a Modelo 720 obligation, because the custody is in Spain. The same ETF purchased through DEGIRO does.

The distinction is about where the assets are held in custody, not what the assets are.

When to File

The Modelo 720 is filed during the first quarter of the year following the reporting year. In other words, if you want to declare the assets you held as of December 31, 2025, the filing window runs from January 1 to March 31, 2026.

However, you do not need to file every year. The rules are:

First Filing

You must file the Modelo 720 for the first time when, as of December 31 of any year, the combined value of assets in any one of the three categories exceeds 50,000 euros.

Subsequent Years (Variation Filing)

Once you have filed the Modelo 720 for the first time, you only need to file again in subsequent years if the value in any category has increased by more than 20,000 euros compared to the last Modelo 720 you filed.

This means that if you filed the Modelo 720 in 2024 declaring 60,000 euros in securities, and at the end of 2024 you have 75,000 euros, you do not need to file again (because the increase of 15,000 euros is below the 20,000-euro threshold). However, if you go from 60,000 to 85,000 euros, you must file because the increase exceeds 20,000 euros.

If You No Longer Exceed the Threshold

If you sold all your foreign assets or dropped below 50,000 euros, you must also file a cancellation declaration informing the tax authority that you no longer hold those assets. This is something many people forget.

How to File the Modelo 720 Step by Step

Filing the Modelo 720 does not require visiting any office. Everything is done online through the Sede Electronica de la Agencia Tributaria (the tax authority's electronic portal). Here is the process:

Step 1: Gather the Required Information

Before you sit down to fill in anything, you need to have the following data at hand:

For bank accounts (category 1):

For securities and investments (category 2):

Most brokers provide this information in their annual reports or position statements. In DEGIRO, you can download the annual report from the documents section. In Interactive Brokers, you have the Activity Statement. In Trade Republic, you can check your positions directly in the app.

Step 2: Access the Sede Electronica

Go to the Sede Electronica de la Agencia Tributaria (sede.agenciatributaria.gob.es). To log in, you need one of these identification methods:

If you do not have any of these, the FNMT digital certificate is the most practical option. You can request it online and then verify your identity at a Social Security office, tax office, or town hall. Plan this ahead of time, as it can take a few days.

Step 3: Locate the Modelo 720 Form

Once inside the Sede Electronica, search for "Modelo 720" in the search bar or navigate to:

Home > All procedures > Taxes and fees > Informational declarations > Modelo 720 — Informational declaration on assets and rights located abroad

Step 4: Fill In the Declaration

The form will ask you to add records for each asset you want to declare. For each one, select the appropriate category and complete the fields.

Some practical tips:

Step 5: Review and Submit

Before submitting, review everything carefully. The most common errors are:

Once you are satisfied, sign and submit the declaration. You will receive a filing confirmation that you should save for your records.

Most Common Mistakes (and How to Avoid Them)

After years of helping investors get organized, these are the mistakes we see again and again:

1. Treating the 50,000-Euro Threshold as a Total Instead of Per Category

This is the number one mistake. The 50,000-euro threshold applies to each category separately. You could have 49,000 euros in accounts and 49,000 euros in securities and not need to file anything. But if you have 51,000 euros in securities alone, you are already required to file — regardless of what you have in the other categories.

2. Not Declaring the Broker's Cash Account

Many investors declare their securities (shares, ETFs) but forget to declare the cash balance they keep at the broker. If your broker is based abroad, that cash balance may constitute a "foreign bank account" and fall into category 1.

3. Not Filing the Variation Declaration

You filed the Modelo 720 last year with 60,000 euros in securities. This year you have 90,000 euros. You think, "I already filed, I do not need to do anything." Wrong. Since the increase exceeds 20,000 euros, you must file a new declaration with the updated figures.

4. Not Filing the Cancellation Declaration

You sold everything and closed your broker account. Many investors believe that, since they no longer hold foreign assets, they do not need to do anything. But you must file a cancellation declaration to inform the tax authority that you no longer hold those assets.

5. Using the Purchase Price Instead of Market Value

The Modelo 720 asks for the value as of December 31, which is the market value on that date. It does not matter if you bought your shares for 30,000 euros and they are now worth 70,000 euros: you declare 70,000 euros.

6. Forgetting That Crypto on Foreign Exchanges Also Counts

Since the latest reforms, if you hold cryptocurrencies on platforms like Coinbase, Binance, Kraken, or other exchanges headquartered outside Spain, they fall under the Modelo 720 if the total value exceeds 50,000 euros.

Modelo D-6: The Other Form Nobody Knows About

In addition to the Modelo 720, there is another form that affects many investors with foreign brokers: the Modelo D-6.

The Modelo D-6 is a declaration of Spanish-resident investments in foreign securities, managed by the Ministry of Economic Affairs and Digital Transformation (through the Directorate General of International Trade and Investment), not by the Agencia Tributaria.

Who must file it: Any resident in Spain who holds negotiable securities (shares, ETFs, funds, bonds) deposited at institutions domiciled abroad. Unlike the Modelo 720, there is no minimum threshold. If you have a single ETF at DEGIRO, you are technically required to file the D-6.

When to file: During the month of January of the following year. That is, for the securities you held as of December 31, 2025, you have until January 31, 2026 to file.

Where to file: Through the Sede Electronica del Ministerio (sede.mineco.gob.es), using the AFORIX service.

What data you need: Identification of the securities (ISIN), number of shares or units, market value as of December 31, country of the custodian institution.

In practice, the Modelo D-6 is less well known and non-compliance has historically had few consequences. But the obligation exists and it is worth fulfilling, especially because the information is very similar to what the Modelo 720 requires — so if you already have the data for one, the other is a matter of minutes.

Current Penalties After the CJEU Ruling

Following the Court of Justice of the EU ruling in January 2022, Spain was forced to reform the Modelo 720 penalty regime. The key changes were:

Does this mean you can ignore the Modelo 720? No. It remains mandatory, and fines, although smaller, still exist. Additionally, failing to declare foreign assets can raise red flags in the event of a tax inspection. The sensible thing to do is to comply.

How Arfin Helps You Track Your Thresholds

One of the most frustrating aspects of the Modelo 720 is not knowing whether you are required to file until you sit down to run the numbers at the end of the year. Has my DEGIRO portfolio crossed 50,000 euros yet? What if I add the cash balance? How much have my securities increased since my last filing?

This is where Arfin simplifies your life. By connecting your broker accounts to Arfin, you can:

Instead of digging through broker reports and spreadsheets, you have all the information consolidated in one place. And the best part: you can check it throughout the year, not only when the deadline arrives and panic sets in.

Frequently Asked Questions

Can I file the Modelo 720 after the deadline? Yes. It is better to file late than not to file at all. The penalties for late filing are lower than those for non-filing.

What happens if my portfolio drops below 50,000 euros after I have already filed? If it rises again and you have not sold, you do not need to do anything until the increase exceeds 20,000 euros compared to your last filing. If you sold everything, file a cancellation.

Does a Revolut or N26 account count as a foreign account? It depends on where the entity holding your money is registered. Revolut operates from Lithuania. N26 from Germany. In both cases, they are foreign accounts for Modelo 720 purposes, if the balance exceeds 50,000 euros.

What if I have accounts at multiple foreign brokers? The values across all your foreign brokers are added together within the same category. If you have 30,000 euros at DEGIRO and 25,000 euros at Interactive Brokers, the total for the securities category is 55,000 euros, and you must declare both.

Do I need to declare my Trade Republic account if it is a savings account? Yes. Trade Republic's savings account is a bank account in Germany. If the balance exceeds 50,000 euros (combined with any other foreign accounts), it falls into category 1 of the Modelo 720.

Conclusion: Compliance Is Easier Than You Think

The Modelo 720 has a bad reputation, and for years that reputation was justified. But after the reform of the penalty regime, the situation is much more reasonable. It remains an obligation, but it is no longer a sword of Damocles hanging over your head.

If you invest through a foreign broker from Spain — and virtually all of the popular brokers in Europe are foreign — the smartest thing you can do is:

  1. Know your situation: Understand how much you hold in each category and whether or not you exceed the thresholds.
  2. Stay organized throughout the year: Do not wait until March 31 to start looking for data.
  3. Use tools that help you: A platform like Arfin lets you stay in control of your portfolio values at all times.
  4. Consult a professional if you have doubts: Especially if your situation is complex (multiple brokers, cryptocurrencies, real estate abroad).

The Modelo 720 is not a punishment for investing abroad. It is an administrative formality. And like every formality, the more organized you are, the less of a headache it will be.

If you want to dive deeper into how to declare your investments on your Spanish tax return, we recommend reading our guide on how to declare your broker investments on Spanish taxes.

This article is for informational purposes only and does not constitute tax advice. Every personal situation is different. Consult a qualified tax advisor for guidance tailored to your case.

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