If you have transactions with non-residents or hold assets and liabilities abroad, you may be required to file Form ETE with the Banco de España. However, this procedure can be unfamiliar and complicated for many companies and individuals. In this article, we explain what the ETE form is, who is obliged to file it, when and how to file it, and the possible penalties for not complying with the obligation.
What is the ETE Form?
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Form ETE (Statement of Foreign Economic Transactions) is an information return that must be filed with the Banco de España. It is regulated by Circular 4/2012, published on 4 May 2012 in the Official State Gazette (BOE). Its purpose is to compile statistical data on the economic transactions that residents in Spain have carried out with non-residents, as well as on the assets and liabilities they hold abroad. This form has a direct impact on the Spanish economy and on the Banco de España’s statistics, so its correct presentation is essential.
The ETE Form includes both commercial transactions and financial flows, and is designed to be filed annually or quarterly, depending on the activity of the company or individual. At Leialta we are a business consultancy specialised in carrying out procedures such as the ETE Form for Spanish and foreign companies.
Who is obliged to file the ETE Form?
In general terms, the ETE Form must be filed by those individuals or legal entities resident in Spain who:
- Carry out economic transactions with non-residents (both individuals and entities).
- Hold assets or liabilities abroad. This includes bank accounts, property, investments, etc.
The filing obligation only applies if the total value of assets, liabilities or transactions with non-residents exceeds €1 million during the previous year.
What must be declared on the ETE form?
- Transactions with non-residents: This includes commercial transactions such as issuing invoices to foreign customers, purchasing goods and services from international suppliers, among others.
- Balances and changes in assets and liabilities abroad: Foreign bank accounts, deposits, shares in foreign companies, financial instruments, real estate, derivatives, etc.
When must Form ETE be filed?
The deadline for filing Form ETE depends on the number of transactions or assets and liabilities involved. The filing deadlines are as follows:
- Annual filing: If the transactions or balances abroad are less than €100 million, the filing must be made by 20 January of the following year.
- For transactions of less than €50 million, a summary annual return must be filed.
- Quarterly filing: For transactions of more than €100 million or for entities with large international flows, filing is quarterly.
In addition to annual and quarterly filings, the regulations provide that, in cases where economic transactions or balances of assets and liabilities exceed €300 million, Form ETE must be filed on a monthly basis. In this case, the declaration must be made within 20 days of the close of each calendar month. This frequency is designed for institutions with significant international flows that have a direct impact on the Banco de España’s statistics.
How is Form ETE filed with the Banco de España?
Form ETE is filed exclusively electronically through the Banco de España’s website. The process is simple, but it is essential to comply with the established requirements to avoid penalties or problems with the tax authorities.
Steps for submitting the ETE Form:
- Access the Banco de España’s digital platform.
- Complete the form with the details of transactions and assets/liabilities abroad.
- Check the information before submitting it to avoid errors.
- Send the form and save the acknowledgement of receipt.
It is crucial to have all the documentation and data correct before filing to avoid penalties.
Penalties for failure to file Form ETE on time
Can you be penalised for failure to file or late filing of Form ETE? Yes, failure to file Form ETE or late filing may result in penalties. The consequences vary depending on the seriousness of the non-compliance:
- Penalties for non-filing: These can be financial and in some cases, it is considered a serious infringement.
- Penalties for late filing: If filed after the deadline, the Banco de España imposes a fine. The amount depends on several factors, such as the size of the transaction and the length of the delay.
It is essential to comply with the deadlines and the regulations in force to avoid any kind of penalty.
Common mistakes when filing the ETE Form and how to avoid them
Here are some of the most common mistakes when completing Form ETE and how to avoid them:
- Not declaring all transactions with non-residents: It is important not to omit any transaction, regardless of its size, to avoid errors in the return.
- Failure to correctly include balances and changes in assets and liabilities: Make sure you declare all balances in bank accounts and other foreign assets.
- Errors in filing deadlines: Remember that the final deadline is 20 January for annual filings, and that there are quarterly deadlines for transactions above certain thresholds.
The ETE Form is an obligation for persons and entities resident in Spain that have transactions with non-residents or assets/liabilities abroad. Correct filing not only helps to avoid penalties, but also contributes to the transparency of international economic transactions.
If you are not sure whether you should file this form or need help to do it correctly, at Leialta we are specialists in this type of procedure.
How can Leialta help you?
At Leialta we are specialists in international tax and legal compliance, including the filing of the ETE Form with the Bank of Spain. We offer a full business advisory service so you can focus on your business while we take care of compliance. Our team is responsible for:
- Requesting and compiling the necessary information for the declaration.
- Carry out an initial analysis of your company’s operations to determine the appropriate periodicity (annual, quarterly or monthly).
- Preparing the ETE forms with all the necessary information and submitting them for your review and approval.
- Generate the XML files so that you can file electronically with your digital certificate.
- Assist in resolving any queries or requirements issued by the Bank of Spain.
- Confirm that the filing has been carried out correctly and on time.
If you need help with this procedure or have any doubts about your obligations, contact us!
