On Thursday 6 June, the European Commission decided to bring an action against Spain before the European Court of Justice (ECJ) concerning the imposition of disproportionate penalties on Spanish taxpayers who fail to declare assets held in other EU and EEA Member States ('Modelo 720').
This decision follows Spain's first formal notice, followed by a reasoned opinion of 15 February 2017, reminding it to ensure the proportionality of those rules it applies to assets held abroad.
Indeed, while Spain requires resident taxpayers to provide information on the assets they hold abroad (real estate, bank accounts and financial assets), the penalties for non-compliance with this rule are higher than those applied for similar offences in a purely national context.
In fact, the Commission relies on the discriminatory and disproportionate nature of the measures taken by Spain. In its press release, the institution adds that sanctions such as these can deter companies and individuals from investing or moving across borders within the single market.
In the Commission's view, these measures taken by the Spanish authorities are therefore likely to prejudice the fundamental freedoms of the Union, namely the free movement of persons, workers, establishment, provision of services and capital. (Original version in French by Martin Molko – intern)