After the third quarter of the financial year and during the month of November of each year, there is an obligation to report certain information to the Tax Agency about the company’s activity during the previous financial year. We are talking about Form 232.
What is Form 232?
Form 232 is an information return that is reported electronically to the Tax Agency when the requirements established for this purpose are met in relation to related-party transactions and/or transactions with tax havens (now called non-cooperative jurisdictions).
Who is obliged to file it?
Those corporate income taxpayers who carry out transactions with related persons or entities under the terms set out in article 18.2 of Law 27/2014 on Corporate Income Tax (LIS) and who exceed certain economic thresholds established in the regulations in force, both in a specific transaction and as a whole and without taking VAT into account, are obliged to file Form 232 and complete the ‘Information on transactions with related persons or entities (art.13.4 RIS)’.
What is the deadline for filing?
It will be filed in the month following the ten months after the end of the tax period to which the information to be supplied refers. Therefore, as a general rule, in the case of taxpayers whose tax year coincides with the calendar year, the deadline for filing the return is from 1 to 30 November.
What is a related-party transaction?
A related-party transaction in corporate income tax refers to those transactions carried out between entities or individuals that are connected in some way, either because they belong to the same business group, are shareholders of the same company, or have other significant ties. Specifically, they are those parties set out in article 18.2 of the LIS.
In conclusion, Form 232 is a compulsory information return with the aim of obtaining greater tax transparency. Failure to file it may be subject to a penalty, as well as failure to justify the elements required in the return itself. Therefore, it is essential to maintain an optimal assistance in this matter, so, for further information, do not hesitate to contact MDG Advisors.
Jesús Raya Zamora.
