Form ETE Spain
Statement of financial balances
and transactions abroad.
Our services include studying your case, advising you, and preparing and submitting Form ETE Spain.
Our experts at ETL ILIA are specialised in all matters relating to assets and securities held abroad. Our experienced team is your best choice for preparing and submitting Form 720 Spain, Form D6 Spain and Form ETE Spain.
Introducing our preparation and consultancy service in relation to Form ETE Spain for both individuals and companies, as well as other consultancy firms that require our help. Our experts are permanently learning and refreshing their knowledge on this and many other tax statements.
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Our professionals at ETL ILIA have extensive experience and expertise in the taxation of assets, goods and rights held abroad, as well as on the importance of their relationship with other tax forms.
Our clients include individuals and other consultancy firms from all over the country, who choose us for preparing their clients’ Form ETE Spain documentation.
Our experts have a combined experience of over 40 years in tax and legal advice, providing our clients with the peace of mind of being in the best possible hands.
We take care of the entire process, from the initial advice, late submissions, and the preparation and submission of the form itself.
We take care of submitting Form ETE Spain, answering communications and appeals, dealing with any potential inspections and resolving all your questions and queries, and anything in between.
1. Form ETE Spain
a. What exactly is Form ETE Spain?
Form ETE Spain is the statement that must be submitted by individuals and companies informing of their financial balances and transactions abroad, when these exceed 1,000,000 euros at the end of the year.
This form is regulated in the Bank of Spain’s Circular 4/2012, of 24 April, on standards for communication by Spanish residents regarding financial transactions and asset and liability balances held abroad, which entered into force on 1 January 2013.
b. Who should submit Form ETE Spain?
You will be required to submit Form ETE Spain as an individual or public or private legal entity resident in Spain, other than payment service providers registered in the Bank of Spain’s official registers, conducting transactions with non-residents (acts, businesses and operations involving charges, payments and/or international transfers, as well as variations in debtor or creditor financial accounts or positions) or those who hold assets or liabilities on an international level.
I.e. you must inform the Bank of Spain regarding:
- Proprietary trading with non-residents, regardless of their nature and how they are settled (transfers, payments or debits from bank or inter-company accounts, by way of compensation or delivery of cash).
- Balances and changes in assets or liabilities in dealings with foreign companies, regardless of the form in which they materialise.
According to Law 19/2003 on the legal regime of capital movements and international transactions, the non-resident status applies to:
- Individuals who have their habitual residence abroad.
- Foreign diplomats accredited by the Spanish Government or foreign personnel who provide services to embassies, consulates and international organisations.
- Legal entities with registered address abroad.
- Branches and permanent establishments abroad belonging to individuals or legal entities residing in Spain.
- Others to be determined through regulations.
c. When is Form ETE Spain to be submitted?
The submission deadline for Form ETE Spain will depend on the amount of the transactions and balances of assets and liabilities.
In general, we can differentiate between three types of submissions:
- Monthly. It is submitted within 20 days following the end of the previous calendar month. This statement must be submitted when the amount of the transactions for the previous year or the balances of assets and liabilities at 31 December of the previous year, are equal to or greater than 300,000,000 euros.
- Quarterly. It is submitted within 20 days following the end of the previous calendar quarter. In this case, the amount of the transactions or the balances of assets and liabilities at 31 December of the previous year, are equal to or greater than 100,000,000 euros.
- Annually. This is submitted by the 20th of January, when the amount of the transactions or balances of assets and liabilities at 31 December of the previous year, is less that 100,000,000 euros.
The annual statement may be summarised when neither the amount of the balances nor of the transactions exceed 50,000,000 euros.
e. How is Form ETE Spain to be submitted?
Form ETE Spain is submitted electronically and must be sent to the Department of Statistics of the Bank of Spain, in line with the established formats and requirements.
Therefore, it cannot be submitted on paper.
2. Risks and penalties
The infringements and penalties for non-submission or late submission of Form ETE Spain are regulated by aforementioned Law 19/2003, which differentiates between very serious, serious and minor penalties.
Very serious infringements include:
- The performance of acts, businesses, transactions or operations prohibited under Articles 4, 5 and 7 of the Law.
- The performance of acts, businesses, transactions or operations without requesting permission when required to do so.
- A lack of veracity in authorisation applications submitted.
Serious infringements include:
- A failure to declare operations for an amount exceeding 6,000,000 euros.
- A lack of veracity, omission or inaccuracy of the data included in the statements for an amount exceeding 6,000,000 euros.
- Non-compliance with the requirements established by the competent bodies.
Minor infringements include:
- The submission of statements outside of the established deadlines.
- A failure to submit statements that do not exceed 6,000,000 euros, as well as a lack of veracity, omission or inaccuracy in the data included in the statements that do not exceed 6,000,000 euros.
Penalties according to the type of infringements are as follows:
Penalties due to very serious infringements:
- A fine that can amount to as much as the economic content of the operation, and may not be less than 30,000 euros and a public or private reprimand.
Penalties due to serious infringements:
- A fine that can amount to as much as half of the economic content of the operation, and may not be less than 6,000 euros and a public or private reprimand.
Penalties due to minor infringements:
- A fine that can amount to as much as 25% of the economic content of the operation, and may not be less than 3,000 euros and a private reprimand.
Additionally, in the event of the infringement consisting of the submission of statements after the deadline without there being a prior request from the Tax Agency, you may be imposed any of the following penalties:
- If the exceeded period is less than six months, a minimum of 150 euros and a maximum of 300 euros.
- If the period exceeds six months, a minimum of 300 euros and a maximum of 600 euros.
3. Implications of Form ETE Spain in other taxes
Being obliged to submit Form ETE Spain, could in some cases be an indicator that there is another form that you also need to submit.
- Form 720 Spain: Form 720 Spain is to be submitted when transactions with non-residents exceed 50,000 euros.
- Income Tax Return: When assets yield dividends, these must be included in your annual income tax return, provided that the requirements are met.
- Wealth Tax: Everything that is included in Form ETE Spain, which is part of your estate, must be declared in your Wealth Tax return, provided the requirements of said tax are met.
4. Conclusions
You must submit Form ETE Spain if you either own your own company or act as an individual and perform transactions with foreign countries in excess of 1,000,000 euros per year.
Bear in mind the importance of complying with this obligation to avoid penalties that may affect your company’s liquidity. Hence, it is essential you seek a specialised adviser who can guide you on the aspects involved in preparing Form ETE Spain, as well as its deadlines and what you can do to amend errors that have been made when submitting previous statements.