The ETE Form is the great unknown for those who own assets abroad. This Form must be submitted to the Bank of Spain, so the Tax Administration does not have any intervention, a fact for which it differs from Form 720.
What is the ETE Form?
It is a statement on economic transactions and balances of financial assets and liabilities abroad and is included in Circular 4/2012 of the Bank of Spain. The Bank of Spain itself is in charge of controlling this Form, which is a mere informative declaration for statistical purposes (to know what operations have been carried out with non-resident subjects and what assets and liabilities they have abroad).
Who must submit the ETE Form and under what requirements?
Any natural or legal person residing in Spain who has assets and liabilities abroad and/or has carried out economic transactions with non-residents is required to submit the ETE Form.
Within the operations in which non-residents intervene, we must take into account that commercial operations of issuing invoices and purchasing goods and services from foreigners are included. Balances and changes in assets and liabilities abroad will also be taken into account.
But this is not the only requirement, since the Bank of Spain imposes another requirement that limits the obligation to submit this form, and that is that only those subjects who, complying with the previous requirement, have a total of assets and liabilities an amount greater than one million euros in the previous year.
What assets should I take into account and how to calculate them?
The assets and rights (provided they exceed one million euros) obtained in the previous year must be included in the ETE Form, so the operations account will cease on December 31 of the year in which the operations are carried out.
To calculate the frequency of the declaration in a specific year, the higher of the following two must be computed:
The sum of the balances of assets or liabilities abroad as of December 31 of the previous year.
The sum of the collections and payments of all the operations carried out in the previous year with non-residents.
Declaration mode How often does the Form have?
The Bank of Spain does not determine a specific periodicity for the presentation of the ETE Form, since it dictates that it will depend on the volume of transactions carried out in the previous calendar year. Thus, certain subjects may submit the Form annually, quarterly or monthly:
The subjects obliged to present the Form annually must have an amount of less than 100 million euros in the total amount of their transactions. In addition, for cases in which said amount does not exceed 50 million euros, the declaration will be summarized.
Subjects who are between the volumes of business mentioned in the previous cases, that is, between 100 and 300 million euros, must make a quarterly presentation.
Subjects required to file monthly must have a volume of operations in the year greater than 300,000 euros, being very remote assumptions.
Breach of filing obligation
The ETE Form is not linked to the Tax Agency, so the sanctions will not be governed by the General Tax Law or specific tax regulations, but rather have a specific sanctioning regime. Law 19/2003, of July 4, on the legal regime of capital movements and economic transactions abroad has a strict regulation of sanctions applicable to ETE Forms.
The Law distinguishes in its article 8 between three types of infractions:
The penalty system for very serious infringements does not apply in these cases because it does not include any case related to non-submission or late submission.
Non-declaration of operations is considered a serious infringement when they exceed 6 million euros or when there is any inaccuracy with the data of the operation when it exceeds the amount mentioned above.
If one of the two cases occurs, article 9 of the Law says that the penalty will amount to half the amount of the undeclared operation, imposing a minimum penalty of 6,000 euros.
Submission of the Form after the deadline, inaccuracy of data in operations with an amount less than 6 million euros and non-declaration of operations less than the aforementioned amount are considered minor infractions.
In this case, the Law imposes a penalty of up to a quarter of the amount of the operation, imposing a minimum of 3,000 euros.