💎 The High-Net-Worth (HNWI) Tax Checklist for Spain
If your net worldwide assets exceed the €700,000 threshold (or the equivalent in the Foral Regimes), your tax obligations extend far beyond the annual Income Tax (IRPF). This checklist focuses on the critical compliance and planning required to minimize liability for Wealth Tax and avoid extreme penalties related to foreign asset declarations.
🔑 Phase 1: Strategic Residency and Compliance
Your first step must be a strategic assessment of your tax domicile, as this instantly determines your annual Wealth and Inheritance Tax liability.
| Task | Action Required / Focus | Implication & Risk |
| 1. Strategic Domicile Selection | Ensure your actual, verifiable tax residency (center of vital interests) is established in a low-tax Autonomous Community (CC.AA.). | Regions like Madrid or Andalusia currently offer a 100% Wealth Tax bonus, effectively eliminating the tax. Other regions have high rates. |
| 2. Annual Wealth Tax Filing | File Modelo 714 (Wealth Tax) if your worldwide net assets exceed the regional limit (national minimum is €700,000. | Annual Obligation. Your liability is calculated based on rates set by your CC.AA. of residence. |
| 3. Solidarity Tax Assessment | Determine if your worldwide net assets exceed the €3 million threshold for the new Temporary Solidarity Tax on Large Fortunes (ITSGF). | This is a State Tax that applies across Spain, even if your CC.AA. has a 100% bonus. The Wealth Tax paid is deductible from the ITSGF bill. |
| 4. Inheritance & Gift Tax Planning | Review the Inheritance & Gift Tax rules of your CC.AA. (e.g., $99\%$ reduction vs. high tax). | Plan wealth transfers inter vivos (gifts) or via Will to maximize the regional tax reduction for heirs. |
🛑 Phase 2: Foreign Asset Declaration (Modelo 720)
Modelo 720 is an informational filing, but it carries the heaviest penalties in Spanish tax law for non-compliance.
| Task | Action Required / Focus | Deadline / Penalty Risk |
| 1. Assess Obligation Thresholds | Aggregate the value of foreign assets in three separate groups: 1. Accounts, 2. Securities/Investments, and 3. Real Estate. | If the total value of assets in any one group exceeds €50,000 (using the December 31st value), filing is mandatory. |
| 2. Annual Filing Requirement | File Modelo 720 every year that a group exceeds the €50,000 threshold, or if the value of a previously declared group increases by €20,000 or more. | Deadline: January 1st to March 31st annually (for assets held in the prior year). |
| 3. Ensure Complete Reporting | Report all assets: bank accounts, brokerage accounts, trusts, life insurance policies, foreign real estate, and digital assets held outside Spain. | Extreme Penalty Risk: Non-declaration can lead to penalties equal to 150% of the tax owed on the undeclared assets, with minimum fines reaching thousands of Euros. |
🏦 Phase 3: Investment and Entity Compliance
High-net-worth individuals often use trusts, companies, or specific investment vehicles that are treated differently in Spain than in their home country.
| Vehicle | Spanish Compliance Concern | Key Action |
| Trusts & Foundations | Spain does not have an equivalent legal figure. These are often treated as either a tax-transparent entity or as a gift from the settlor. | Seek expert legal/tax advice; Spanish tax treatment is complex and heavily scrutinizes these structures. |
| Foreign Investment Companies | Ensure your investment funds are UCITS-compliant or are not considered PFICs (Passive Foreign Investment Companies). | Non-compliant funds can trigger punitive tax treatment (e.g., deemed capital gains tax) or complex annual reporting. |
| Expat Private Pensions | Identify if your private pension is considered an “External Insurance Contract” or a fully protected Pension Fund. | If treated as insurance, it may be subject to Wealth Tax based on the surrender value. If treated as a pension, the tax is generally deferred until withdrawal. |
⚠️ Crucial Warning: For the HNWI category, non-compliance with Modelo 720 or miscalculating Wealth Tax can result in severe financial consequences. Always secure professional tax advice tailored to your specific regional and asset situation.
Tax Guide 2026
If you need an overall view of tax obligations, click on Taxes in Spain Guide 2026.
