The Official Gazette of the Government of Spain, dated 30 August 2017, published the Order HFP/816/2017 of 28 August, approving form 232 for the informative tax declaration regarding related transactions, as well as the transactions and financial situations related to countries or territories considered as tax havens.

For tax periods beginning on or after 1 January 2015, a comprehensive and complete reform of  Corporation Income Tax legislation was carried out. And in the area of related transactions, the Law introduced novelties in relation to the specific documentation to be prepared by the affected entities. However, the documentation obligation is separate and independent from the information obligation, which is the object of this newly published order.

This information obligation is based on article 13.4 of the Corporation Income Tax Regulation. Traditionally, this obligation has been fulfilled by completing the table description included in the form 200 (the corporation income tax return). Yet, for this obligation and for tax periods beginning on or after 1 January 2016, the previous tax declaration form 200 used for this purpose shall be replaced by a new specific form (form 232). The causes of the change are:

  1. It is considered more accurate to include the chart, the content of which is merely informative, in an informative declaration, which only entities who are required to report on transactions with related persons or entities will have to complete.
  2. Removing the informative table from the declaration form resulted in the reduction of indirect tax charges associated with the submission of the tax return.

For these reasons, the information relating to the transactions and financial situations related to countries or territories considered as tax havens, which are included in the form 200, will now be transferred to the new form 232.

Form format

Form 232 is available exclusively online.

Obligors

1) Form 232 and filling in the “Information of transactions of related persons or entities”

The following are obligated:

  • Both corporation and personal non-resident income taxpayers that are acting through a permanent establishment that carry out the following transactions with related persons or entities:

a) Transactions carried out with the same person or related entity provided that the consideration for a set of transactions in the tax period exceeds 250,000 Euro, according to the market value.

b) Specific transactions provided for in articles 18.3 of the Corporation Income Tax Law and 16.5 of the Corporation Income Tax Regulation, as long as the joint amount of each of this type of transactions in the tax period exceeds 100,000 Euro.

However, it will not be mandatory to complete the “Transaction information with related persons or entities” with respect to the following transactions:

  • Transactions between entities that are part of the same consolidated tax group.
  • Transactions with one of their members or with other entities which form a part of the same consolidated tax group according to economic interest groupings.
  • Transactions carried out in the public scope offering to sell or to acquire securities.

Regardless of the total amount of the consideration for the set of transactions carried out with the same person or related entity, it shall be mandatory to submit form 232 and complete the “Information on transactions with related persons or entities” with respect to transactions of the same type and which use the same evaluation method, provided that the total amount of the set of said transactions in the tax period exceeds 50% of the entity’s turnover.

2) Form 232 and filling in the “Information on transactions with related persons or entities” in the case of the application of a reduction of income arising from certain intangible assets:

  • When the taxpayer applies said deduction because he obtains income as a consequence of the assignment of certain intangibles to related persons or entities.

3) Form 232 and filling in the information regarding “Transactions and financial situations related to countries or territories qualified as tax havens”:

  • When the taxpayer carries out transactions or has securities in countries or territories classified as tax havens regardless of their amount.

Term

The filing of the form 232 must be carried out in the month following the 10th month after the end of the tax period to which the supplied information refers.

As for tax periods commencing in 2016 and ending before 31 December 2016, the term shall then be from 1 November  to 30 November  following the completion of the tax period to which the supplied information refers.

 

 

Mika Otomo

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

15th of September 2017