In accordance with Circular 4/2012 of the Bank of Spain, individuals and legal entities are required to report to the Bank of Spain their economic transactions and balances of financial assets and liabilities with foreign entities carried out during 2020. During the current month of January 2021, depending on the case, the ETE Form must be submitted to the Bank of Spain and the D-6 Form to the Directorate General for International Trade and Investments under the Ministry of Industry, Trade and Tourism.
We remind you that according to Circular 4/2012 of the Bank of Spain, residents in Spain (both natural and legal persons) are required to report to the Bank of Spain transactions and balances of financial assets and liabilities with foreign entities (ETE form).
In addition, individuals or legal entities resident in Spain must submit a declaration (form D-6) to the Spanish Investments Abroad Registry. This declaration must be completed for investments in companies listed on a Stock Exchange or Organized Market and when the securities are deposited with an entity domiciled abroad or remain in the custody of the investment holder.
REPORTING OBLIGATIONS TO THE BANK OF SPAIN: ETE FORM
Current regulations on economic transactions with foreign countries establish the obligation for all residents in Spain, other than payment service providers registered in the official registers of the Bank of Spain, to declare to this body:
– Own account transactions with non-residents, whatever their nature and regardless of how they are settled (through accounts of residents in Spain or abroad, by compensation or by cash delivery).
– The balances and their variations of foreign assets and liabilities.
Companies belonging to a group must submit the corresponding information individually. However, if certain requirements are met, this information may be submitted jointly by a single sender.
Natural persons and legal persons (public or private) resident in Spain, other than payment service providers (credit institutions and payment institutions) registered in the official registers of the Bank of Spain, are required to report to the Bank of Spain.
WHAT SHOULD BE COMMUNICATED?
The Bank of Spain must be informed of any transactions carried out with foreigners; and of the balances of assets and liabilities abroad, as well as any changes that occur in such positions.
Transactions with non-residents include all proprietary transactions, regardless of their nature and settlement method. For these purposes, transactions include all acts, business dealings, and operations that involve—or may result from—collections, payments, or external transfers, as well as changes in debit or credit accounts or financial positions.
Likewise, it is necessary to report the balances and variations of assets and liabilities with respect to foreign entities, regardless of the form in which they materialize.
Attention. This obligation applies, for example, to those (resident) private banking clients in Spain who carry out transactions on their own account with non-residents, whatever their nature and regardless of how they are settled, that is, whether settled through external transfers, through credits or debits to bank or intercompany accounts, by clearing or by delivery of cash, and/or who have opted for a custody model for their cash and securities abroad, and who, therefore, have balances and variations of assets or liabilities against foreign entities, whatever the form in which they materialize (accounts in banking or financial entities, intercompany accounts, cash or securities deposits, equity holdings, debt instruments, derivative financial instruments, real estate, etc.).
WHEN SHOULD YOU COMMUNICATE?
The frequency of communications will depend on the volume of transactions carried out by the obligated parties during the immediately preceding year, as well as the asset and liability balances of said obligated parties on December 31 of the previous year.
Declarations must be submitted monthly, quarterly or annually as soon as the corresponding thresholds are met:
- Monthly periodicity, and within 20 days following the end of each calendar month, when the sum, one by one and without offsetting credit and debit balances in order to present a single balance, of the transactions with non-residents during the immediately preceding year, or the sum of the balances of assets and liabilities on December 31 of the previous year, are equal to or greater than 300 million euros.
- Quarterly periodicity, and within 20 days following the end of each calendar quarter, when the sum, one by one and without offsetting, of the transactions with non-residents during the immediately preceding year, or the sum of the balances of assets and liabilities on December 31 of the previous year, are equal to or greater than 100 million and less than 300 million euros.
- Annual periodicity, and no later than January 20 of the following year, when the sum, one by one and without offsetting, of the transactions with non-residents during the immediately preceding year, or the sum of the asset and liability balances on December 31 of the preceding year, are less than 100 million euros.
It is important to clarify that:
- A declaration must be submitted, even if no transactions have been carried out in the corresponding period, if the external asset or liability balances reach the notification thresholds.
- All transactions and variations of the period must be reported, even if their final balances were zero.
- Within the same financial year, it is not permitted to change the periodicity more than once, nor to change the periodicity to one with a lower frequency (i.e., going from monthly to quarterly or from quarterly to annual).
Attention. When the aforementioned amounts do not exceed one million euros, the declaration will only be sent to the Bank of Spain at its express request and within a maximum period of two months from the date of the request.
However, those residents who, having not reached the declaration thresholds mentioned above, exceed them during the current year will be obliged to submit declarations with the corresponding periodicity, from the moment in which said limits are exceeded.
Special case: Summary Annual Declaration
Notwithstanding the foregoing, Circular No. 4/2012 provides for a special case regarding the possibility of submitting a summary annual declaration within the 20 days of January 2021, provided that the amount of the transactions or balances referred to above are greater than 1 million euros and do not exceed 50 million euros.
HOW SHOULD WE COMMUNICATE?
Only electronically. The information must be sent to the Statistics Department of the Bank of Spain, using a single form via electronic means (ETE model, survey of foreign transactions).
According to this regulation, individuals must submit this form using an electronic ID card or an electronic certificate issued by the National Mint and Stamp Factory (FNMT), obtained individually for each individual.
Legal entities must have an electronic certificate issued by the FNMT or the CNMV or the Bank of Spain.
For more information:
Bank of Spain link associated with Declarations of transactions with foreign countries
https://sedeelectronica.bde.es/sede/es/menu/tramites/Presentacion_po_31e444328b15831.html
MODEL D-6
Form D-6 is a declaration that individuals or legal entities residing in Spain must submit to the Registry of Spanish Investments Abroad. Specifically, this declaration must be completed for investments in companies listed on a Stock Exchange or Organized Market, and when the securities are deposited with an entity domiciled abroad or remain in the custody of the investment holder.
In what cases should it be submitted?
This model can be used both for the declaration of operations for each investment or liquidation carried out in non-resident companies, and for the declaration of securities deposited abroad (shares, bonds, participations in investment funds, etc.) as of December 31, 2020.
As we can see, there are 2 types of Model D-6, but for the purposes of this article, we will only focus on the declaration of values deposited abroad.
Attention. Regarding the amounts to be declared, the regulations do not provide anything in this respect, so the mere fact of owning even one share of a listed company held abroad requires you to declare it.
How and when to submit Form D-6 for the declaration of deposits?
The D-6 deposit declaration form must be completed and submitted electronically, using the AFORIX along with the electronic ID card or certificate issued by the FNMT.
Regarding the submission deadline, this corresponds to the month of January 2021.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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