If you are a tax resident in Spain and own assets or investments outside the country, it is important that you know and understand the tax obligations you have to comply with. In this article, we explore three key tax forms you should be aware of: ETE, D-6 and 720. Although they all relate to the declaration of assets and transactions abroad, they have different purposes and requirements. Here we explain what they are, who must file them, what is declared in each one, and the key differences between them.
What are the ETE, D-6 and 720 forms?
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The ETE, D-6 and 720 forms are information forms that must be filed by tax residents in Spain who have assets, goods or rights abroad. Each of these forms has a specific purpose, but all are designed to provide the Spanish Tax Agency with information on transactions and assets outside the country.
- ETE Form: This is used to declare payments and receipts made to and from non-residents, as well as assets and liabilities located outside Spain. This form must be filed by both individuals and legal entities that exceed the established financial thresholds.
- Form D-6: This form is used to declare negotiable securities held in entities not resident in Spain. This form is aimed at individuals and legal entities that at 31 December hold these securities outside the country.
- Form 720: This form refers to assets and rights located abroad, and is divided into three main blocks: accounts in financial institutions, securities and rights abroad, and real estate abroad. Its filing is compulsory mainly for individuals, although there are exceptions for some legal entities.
Who is obliged to file these forms?
The obligation to file the ETE, D-6 and 720 forms falls mainly on persons resident for tax purposes in Spain who have investments or assets outside the country. The obligation varies according to each form:
- Model ETE: It must be filed by both individuals and legal entities that carry out transactions with non-residents or hold assets or liabilities outside Spain. This form is filed when the established thresholds are exceeded, which are usually 1 million euros.
- Form D-6: To be filed by individuals and legal entities that, at 31 December, have negotiable securities outside Spain. Filing is annual and must be done in January.
- Form 720: This form is mainly aimed at individuals, although some legal entities are also obliged to file it. The declaration must be made between 1 January and 31 March each year, and the assets to be declared must exceed certain thresholds (e.g. EUR 50,000 for each block).
What should be reported on each model?
Although all three forms relate to foreign assets, the details of what to report vary:
What to declare on the ETE Model:
It is used to declare:
- Collections and payments made with non-residents.
- Foreign assets and liabilities, such as shares, bonds, real estate, loans, deposits and financial derivatives.
This form has a broader scope than the D-6, as it is not limited only to marketable securities, but also covers other types of assets and liabilities.
What to declare on Form D-6:
This form only covers negotiable securities, i.e. financial assets held in entities not resident in Spain, such as shares, units in investment funds, public debt, etc.
What to declare in Form 720
Form 720 covers three main blocks of information:
- Accounts in financial entities abroad.
- Securities, rights, insurance, and income managed outside Spain.
- Real estate and rights over real estate outside the country.
This form has a broader scope compared to the other two, as it covers not only financial assets, but also tangible assets such as real estate.
Key differences between the forms
Although all three forms are focused on the declaration of assets outside Spain, they have notable differences in terms of their purpose, filing obligation and deadlines:
The purpose of each is:
- The ETE is used to report transactions with non-residents and assets/liabilities located outside Spain.
- The D-6 focuses exclusively on marketable securities held outside Spain.
- Model 720 has a broader focus, covering both financial assets and tangible property, including bank accounts and real estate.
Everyone is obliged to file:
- ETE: To be filed by both natural persons and legal entities.
- D-6: It must also be filed by both individuals and legal entities.
- Form 720: This must be filed mainly by individuals, although some legal entities are also obliged to file it.
Deadlines and periodicity:
- ETE: It is filed annually, with a deadline of 20 days after the close of the declaration period.
- D-6: It is filed in January of each year.
- Form 720: Filing takes place between 1 January and 31 March, with thresholds of 50,000 euros for each block of assets.
Consequences of not filing the forms or misdeclaration
Failure to file any of these forms can result in severe penalties:
- For the ETE: Penalties can range from €3,000 to up to 50% of the undeclared value, if the threshold of €6 million is exceeded.
- For D-6: If the declaration is omitted or filed late, the penalty can be 25% of the undeclared value, with a minimum of €3,000.
- For Model 720: The penalties are particularly severe, with fines of up to €5,000 for each incorrect or undeclared entry. In addition, if assets are not regularised in the last tax return, additional penalties may be imposed.
Tips for complying with tax obligations
Complying with the tax obligations related to these models can be complex, but by following a few tips you can avoid penalties and keep up to date with the regulations:
- Keep a clear record of your foreign investments and assets.
- Consult a specialised tax advisor to ensure you comply correctly.
- Declare all assets and securities as required by law, without omitting any relevant information.
- Meet the deadlines to avoid penalties for delays.
If you are a tax resident in Spain and have assets or investments abroad, it is essential that you understand the ETE, D-6 and 720 forms and their differences. Filing these declarations properly is crucial to comply with tax obligations and avoid costly penalties. If you have any doubts about how to comply with these obligations, the best option is to seek the advice of a tax professional, such as our expert team at LEIALTA. With our help, you can ensure that your tax returns are correct and complete, protecting your wealth and keeping you up to date with the tax authorities.
