On August 30th 2017, the Spanish Tax Authorities released a new tax filing obligation, Tax Form 232, that must be used to report both transactions with related parties and with tax haven territories or alike countries, aside from Transfer Pricing Documentation requirements.
This Form 232 is to be submitted by legal entities incorporated in Spain and/or Non-Resident entities with a permanent establishment (PE) in Spain (ie: Branches, etc.).
Form 232 must be filed within the month following the first ten months after the end of the fiscal year to which it refers. In other words, for fiscal years ended December 31st 2020, the filing period will end November 30th 2021.
Failure to timely and accurately comply with this tax filing obligation, might entail severe penalties up to 2% of the missing data (ie: revenue, accrued interests during the year, etc.) or wrong information provided.
Information to be reported should include:
- Transactions when the total amount of all the relevant transactions with the same entity exceed € 250k within the FY.
- So-called “specific transactions“, whenever the total amount of each type of transaction exceeds € 100k within the FY, regardless of the valuation method that is applied. For clarification purposes please note that the so-called “specific transactions“ are the following
- Transfer of businesses.
- Transfers of securities or shares in non-listed entities and/or tax haven resident entities.
- Transfers or transactions involving real estate and/or intangible assets.
- Transactions performed by Personal Income Tax taxpayers that carry on an economic activity to which the “objective estimation method“ applies with entities in which they or their spouses, ascendants or descendants, own 25% or more of the share capital or equity (on a joint or individual basis).
- It is however mandatory to file the Form when transactions of the same type (and to which the same valuation method is applied) with related parties represent a sum above 50% of the turnover of the entity within the relevant FY.
- Finally, the filing of Form 232 is also mandatory for taxpayers that apply the “patent box regime” and for taxpayers that carry out transactions with tax haven countries or territories or hold investments in residents in such blacklisted jurisdictions.
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