The approval, last August, of the new Form 232 for the informative declaration of related-party transactions and transactions and situations related to tax havens established an obligation for corporate income taxpayers and which was already applicable to tax periods started as of January 1, 2016, most of which had therefore already filed the Tax Return (Form 200) in July 2017.
Given that the deadline for filing this new model is the month following the 10 months after the end of the tax period, when the tax period coincides with the calendar year (as is the case for the vast majority of companies in Spain), this means that the information of this model 232 relating to the 2016 fiscal year, must be filed in this month of November 2017.
Although the purpose of this Form 232 is to transfer certain information tables that were traditionally reported in the corporate income tax return (Form 200), this new return expands some of the cases of transactions that must be reported and, as a special novelty, must be declared:
– Those transactions of the same nature which in turn use the same valuation method, provided that the total amount of such transactions with all the related entities in the tax period in question exceeds 50% of the turnover .
– Certain specific operations provided that the combined amount of each of these types of operations exceeds €100,000.
It is important to note that, therefore, the new instructions require a greater number of transactions to be reported than those that generate the obligation to prepare documentation on related-party transactions. It is therefore advisable to verify them in detail in order to avoid incurring penalties for failing to declare such transactions.
The transactions to be reported are as follows:
1) Information on transactions with related persons or entities:
The following operations should be included:
1.1) Transactions carried out with the same person or related entity when the amount of the consideration for the set of transactions in the tax period exceeds €250,000, based on market value.
1.2) Specific transactions carried out with related persons or entities, provided that the aggregate amount of each of these types of transactions exceeds €100,000 on a cumulative basis. The specific transactions referred to in this point are as follows:
- Those carried out by IRPF taxpayers, in the development of an economic activity, to which the objective estimation method is applicable with entities in which they or their spouses, ascendants or descendants, individually or jointly among all of them, hold a percentage equal to or greater than 25% of the capital stock or equity.
- Business transfer operations.
- Transactions involving the transfer of securities or shares representing the equity of any type of entities not admitted to trading on any of the regulated securities markets, or which are admitted to trading on regulated markets located in countries or territories classified as tax havens.
- Real estate transfer operations.
- Transactions on intangible assets.
1.3) Regardless of the amount of the consideration of the set of transactions carried out with the same person or related entity, those transactions of the same nature which in turn use the same valuation method must be declared, provided that the amount of the set of such related transactions in the tax period exceeds 50% of the entity’s turnover.
2) Transactions with related persons or entities in case of application of the reduction of income from certain intangible assets:
This section must be completed by taxpayers who have applied the reduction of income from certain intangible assets (Article 23 and DT 20ª of Law 27/2014, on Corporate Income Tax, of November 27) for having obtained income as a result of the assignment of certain intangible assets (Patent Box) to related persons or entities.
3) Operations and situations related to countries or territories considered as tax havens:
It must be completed by taxpayers who carry out transactions or hold securities in countries or territories classified as tax havens, regardless of the amount involved.
Attached is a link to the AEAT website with a list of these territories updated to 2017: https://www5.aeat.es/es13/s/iafriafrc05f
Finally, the transactions that are not required to be reported in this declaration are detailed:
– Those carried out between entities that form part of the same tax consolidation group, with the exception of the obligation to report the transactions in point 2 above (Patent Box), which must be reported in all cases.
– Transactions carried out with its members or with other entities forming part of the same tax consolidation group by economic interest groupings, and temporary joint ventures registered in the special registry of the Ministry of Finance and Public Function, except for temporary joint ventures, or formulas of collaboration analogous to temporary joint ventures, which avail themselves of the regime established in article 22 of the LIS.
– Transactions carried out in connection with public offers for sale or takeover bids for securities
In this regard it is worth remembering that the deadline for submitting this declaration ends on 30/11/2017, so those who have not started the analysis and collection of information are in difficulties.
They are going to have to exercise a little bit to keep that flight!!!!