Many companies and natural persons are unaware of the existence of the so-called ETE form (Statement of Foreign Transactions) and the obligation to present it if a certain number of transactions with non-residents is exceeded or if they have assets in foreign countries.
The Statement of foreign economic transactions and asset and financial liability balances are regulated in the Circular 4/2012 of the Bank of Spain, and is an informative statement with statistical purposes that is presented to the Bank of Spain in order to declare transactions carried out with non-residents and any assets and liabilities held abroad.
It must be noted that this ETE form is a different statement to that of model 720 regarding the Informative statement of assets and rights located abroad that we have already discussed in previous posts, which is presented before the State Tax Administration Authority and is therefore an informative tax statement.
This statement must be presented by all natural or legal persons resident in Spain who hold assets or liabilities abroad and/or who have carried our economical transactions with non-residents, provided that the sum of such assets and liabilities or the sum of the transactions carried out exceeds 1 million euros in the preceding year.
In particular, the following must be declared to the Bank of Spain:
It must be noted that this also includes commercial operations involving the issuance of invoices to non-residents or the purchase of goods and services by foreigners.
The deadline to present the statement depends on the volume of transactions carried out in the preceding calendar year or asset and liability balances held abroad on the 31st December of the preceding year, in such a way that:
However, in the event that these limits have not been exceeded in the preceding year, but they are exceeded throughout the current year, said statement must still be presented as frequently as corresponds.
Moreover, as anticipated, if the sum of the operations or asset and liability balances in the preceding year is less than one million euros, you are not obliged to present an ETE form unless the Bank of Spain expressly requires you to do so.
In any case, if you are obliged to present this statement, then you must include all operations carried out within the period, regardless of the individual quantity of each of them.
With regards to the mode of presentation, the aforementioned form must be submitted electronically to the Bank of Spain’s Statistics Department.
In order to work out how often the statement must be presented in a given year, the following calculations must be carried out:
The highest of the two sums shall determine the frequency of the statement.
The penalty system applicable to the ETE form is rather strict and is regulated in Spanish Law 19/2003, of 4th July, on the legal regime of capital movements and foreign economic transactions. The regulation establishes that:
In this post we have attempted to give a brief summary and highlight the most important aspects of the ETE form, although we always recommend that you revise your specific situation with a reliable tax consultant who is familiar with this legislation because it is a highly specialised and rare topic.
The original conditions of the city of Malaga and its coast (climate, geographical location, gastronomy,…
The rules for distributing dividends in capital companies are set out in Royal Legislative Decree…
The Supreme Court, in a recent ruling (STS 707/2023, of February 28) ruled on whether…
The presence of a notary public and the public faith that he or she imparts…
Individuals who acquire their tax residence in Spain as a result of moving to Spanish…
We obtain a favourable ruling in an eviction trial condemning the tenant to vacate the…