ETE Declaration Banco de España: Mandatory for Foreign Assets and Transactions

Anyone who, as a resident in Spain, holds assets abroad or regularly does business with non-residents will sooner or later come across the ETE declaration of the Banco de España. Unlike the better-known Modelo 720, the ETE is not intended for the Spanish tax office, but for the Spanish central bank – it collects statistical data on cross-border economic flows. The reporting obligation was introduced with Circular 4/2012. It affects not only large corporations, but also small businesses, self-employed people and, in certain cases, private individuals with links abroad. In this guide, you'll learn who must report, which transactions are covered, how reporting frequency and deadlines differ – and how the ETE differs from the tax reporting obligation under Modelo 720.

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• Modelo 720: Reporting obligation for foreign assets

What is the ETE declaration?

The ETE is a mandatory report to the Banco de España, through which the Spanish central bank records the foreign trade activities of individuals and companies resident in Spain. The legal basis is Circular 4/2012 of the Banco de España. The aim is to gather statistical data on international financial flows and asset holdings – the ETE feeds into balance-of-payments statistics and the overall economic monitoring of Spain's international economic ties.

Important to understand: the ETE is not a tax form. No tax is levied through it; it is purely informational or statistical in nature. Nevertheless, submission is mandatory if you meet the criteria – and violations of the Banco de España's reporting obligations can be penalised.

Note: Don't confuse the ETE with the Modelo 720 of the Agencia Tributaria (AEAT). Both reporting obligations can exist in parallel, but they concern different authorities and serve different purposes. More on this below.

Who must submit the ETE declaration?

In principle, reporting obligations apply to Spanish residents – both private individuals and companies – who meet certain requirements. These include, among others:

• Individuals and companies with foreign assets (e.g. shareholdings, balances, property abroad)
• Individuals and companies that carry out transactions with non-residents (cross-border trade, services, investments)
• Small and medium-sized enterprises (SMEs) that trade or invest internationally – not just large corporations

This means that even an autónomo on Mallorca who regularly invoices clients abroad, or a Spanish SL with a German subsidiary, can in principle fall within the scope of the ETE. Whether and how often a report actually needs to be filed depends on the volume of foreign positions or transactions, which the Banco de España sets as the threshold.

If you work as a self-employed person on Mallorca and regularly work across borders, it's worth taking a look at our guide on Autónomo Spain as well as Bookkeeping for Autónomos, to plan ahead for reporting obligations in good time.

Which transactions must be reported?

The ETE covers a broad spectrum of cross-border economic transactions. Three categories are at the centre of the reporting obligation:

The report is intended to provide as complete a picture as possible of a person's or company's international financial position. That's why it's not enough to report only individual payments – holdings (e.g. balances on a German account as of the reporting date) are also part of the declaration.

Note: Anyone holding foreign assets often has to keep several reporting obligations in mind at the same time – the statistical ETE for the Banco de España and, where applicable, the tax-related Modelo 720 for the AEAT. The two are not mutually exclusive.

Reporting frequency: annually, quarterly or monthly

How often you must submit the ETE depends on the scale of your foreign positions or transactions. The Banco de España sets the relevant thresholds and can adjust them. In principle:

What matters is the transactions of the immediately preceding year, or the holdings of foreign assets and liabilities as of 31 December of the previous year. The Norma tercera of Circular 4/2012 tiers this as follows:

The point that matters for most readers of this guide: If the amount exceeds one million euros does not, the declaration is only submitted upon explicit request of the Banco de España — then within two months from the date of the request. In this area, then, there is no obligation to file annually of one's own accord. Anyone holding a holiday property, an account or a modest shareholding abroad practically always falls under this category. Blanket statements such as "reporting obligation from one million" oversimplify this and create unnecessary worry.

A simplified annual declaration — only opening and closing balances of foreign assets and liabilities as well as the totals of incoming and outgoing payments — is permitted, as long as neither balances nor transactions exceed €50 million.

Anyone who exceeds the thresholds during the current year becomes obliged to file at the corresponding frequency from the point the threshold is exceeded. The Banco de España can, in individual cases, demand a more frequent or an unabridged declaration. Since the Circular can be amended, for larger volumes it is worth checking the consolidated version or consulting a tax advisor for expats.

ETE vs. Modelo 720: two different reporting obligations

Many expats confuse the ETE with the Modelo 720, because both have something to do with "foreign assets". In fact, these are two separate reporting obligations with different responsible authorities:

If you own accounts, securities or property in Germany, you should therefore check both reporting obligations separately. You can find more details on the tax side in our guide to Modelo 720 and – for crypto assets – to Modelo 721.

International context: automatic exchange of information

The ETE reporting obligation is part of a broader trend towards greater transparency regarding cross-border assets. Since 1 January 2016 the EU directive on the automatic exchange of information on financial accounts (AIA, also known internationally as AEOI) has applied in Germany and Spain, based on Directive 2014/107/EU. Its aim is to combat cross-border tax evasion through the automatic exchange of tax-relevant data between the participating states. The ETE report to the Banco de España supplements this system with a purely statistical, non-tax-related component.

ETE and the German AWV reporting obligation: obligations on both sides

Anyone who still has economic ties to Germany – such as a German account, a business or larger payment flows – should be aware that Germany also has a comparable reporting obligation: the AWV reporting obligation to the Deutsche Bundesbank. It applies to payments to and from abroad from €12,500.

Note:Both reporting obligations must be checked independently of one another. Anyone who is economically active between Germany and Mallorca – for example as a Autónomo with a foreign client – may become subject to reporting obligations under both systems.

How and where do you submit the ETE declaration?

The ETE is submitted to the Banco de España. Its headquarters is in Madrid, and although there is no independent branch on the Balearics with its own processing for regional matters, the Banco de España does maintain a branch office in Palma, through which general enquiries can be directed to the central bank.

1. Check whether a reporting obligation exists – based on foreign assets, transaction volume or company structure
2. Clarify the applicable reporting frequency – annually, quarterly or monthly, depending on the threshold
3. Fill in the ETE form – details on commercial transactions, financial operations and foreign assets
4. Submit on time – in accordance with the reporting frequency assigned to you
5. If in doubt, ask a question – via the official channels of the Banco de España or with the support of a Gestoría

Please note: As the ETE forms and reporting portals can be technically complex, it is worth involving an experienced tax advisor in Mallorca early on for cross-border business, someone who keeps an eye on both reporting obligations – ETE and Modelo 720.

Most common mistakes

Many emigrants and entrepreneurs underestimate the ETE reporting obligation or confuse it with other reporting obligations. Typical pitfalls:

What happens next?

After submitting the ETE declaration, the Banco de España uses the data for statistical purposes – in particular for balance of payments statistics and monitoring Spain's economic ties with other countries. As a rule, there is no individual feedback if the report was correct and submitted on time. However, in the event of discrepancies or queries, the Banco de España may follow up. In parallel, you should check whether these same foreign positions give rise to further obligations – such as the annual tax return (Renta) or wealth tax, should your total assets exceed the relevant thresholds.

ETE declaration checklist

• Do I have foreign assets (accounts, holdings, property) or transactions with non-residents?
• Am I a tax resident in Spain? (see Tax residency Spain)
• Do I know my assigned reporting frequency (annual/quarterly/monthly)?
• Have I also checked Modelo 720 in case foreign assets exceed €50,000?
• Have I clarified any parallel obligations in Germany (AWV)?
• Am I consulting a specialised tax adviser or gestor?

Conclusion

The ETE declaration to the Banco de España is a frequently overlooked but mandatory report for anyone who, as a resident in Spain, holds foreign assets or does business with non-residents. It is purely statistical in nature and replaces neither Modelo 720 nor other tax obligations – on the contrary, both systems often apply in parallel. Anyone with an international setup, whether as a private individual, autónomo or company, should check early on which reporting obligations apply, how often reports must be filed, and whether additional obligations exist in Germany (e.g. the AWV reporting requirement). If in doubt, specialised tax advice can help you keep track of all deadlines.

Frequently asked questions

Official sources

• Banco de España – official website: https://www.bde.es
• Banco de España – Palma branch: https://www.bde.es/wbe/en/sobre-banco/organizacion/sucursales/palma.html
• Banco de España – legal framework (Regulations applicable to the Banco de España): https://www.bde.es/wbe/en/sobre-banco/transparencia/informacion-institucional-planificacion/marco-juridico
• Banco de España – supervisory guidelines: https://www.bde.es/wbe/en/punto-informacion/contenidos/normativa-guias-recomendaciones/guias-supervisoras-banco-espana