Form 232 is a crucial informative return for entities carrying out related-party transactions and those involving jurisdictions classified as tax havens. Related-party transactions are those conducted between persons or entities that have a direct or indirect relationship of control. Article 18 of the Spanish Corporation Tax Act (Ley del Impuesto sobre Sociedades (LIS)) stipulates that transactions between related companies must be valued at market price. Where there is a discrepancy between the market value and the agreed value of the transaction, that difference must be reflected in boxes [01011] and [01012] of Form 200 in order to adjust the taxable base, as appropriate.
Form 232 must be filed by certain taxpayers depending on their tax regime and the type of transactions carried out. The main cases are as follows:
Corporation Tax taxpayers.
Companies subject to Corporation Tax that carry out related-party transactions are required to file this form. This applies both to large corporations and to small and medium-sized enterprises (SMEs) that exceed certain thresholds in their transactions.
Non-Resident Income Tax (IRNR) Taxpayers
Those operating through a permanent establishment in Spain are also required to comply with this obligation.
Entities under the Income Attribution Regime
Entities such as comunidades de bienes, civil companies and others that are not taxed as companies but attribute their income to partners or members are also obliged to file Form 232 if they carry out related-party transactions. This is because the income and results of these entities are attributed directly to their participants.
Important:
Article 13.4 of the Corporation Tax Regulation (Reglamento del Impuesto sobre Sociedades (RIS)) establishes that taxpayers are obliged to include in the relevant returns the information relating to their related-party transactions, under the terms and conditions set out by Order of the Minister of Finance. This provision seeks to ensure transparency and proper compliance with tax obligations in respect of transactions between related parties, thereby enabling the Tax Administration to carry out adequate monitoring and supervision of such dealings.
The following are the main cases in which transactions must be reported in Form 232:
Specific transactions exceeding €100,000 per annum.
Where transactions account for more than 50% of the entity’s turnover, with no minimum threshold.
There are transactions subject to the regime for income reduction on intangible assets (Patent Box).
Dealings with individuals taxed under the objective assessment regime who, either individually or jointly with family members, hold a stake equal to or greater than 25% of the company’s capital or equity.
Transfers of businesses, securities or shares in the quity of entities not admitted to trading, or admitted to trading in tax havens.
Transfers of real estate and transactions involving intangible assets, such as patents, trademarks or similar rights.
The following are not subject to the obligation to file Form 232:
Transactions between entities within the same tax consolidation group.
Transactions between Economic Interest Groupings (Agrupaciones de Interés Económico (AIEs)) and Temporary Business Associations (Uniones Temporales de Empresas (UTEs)) and their members, save for certain specific exceptions. They must be covered by the regime established in art. 22 of the LIS.
Transactions arising from public offers for the sale or acquisition of securities.
These exclusions facilitate compliance for the entities involved.
Form 232 is divided into three main sections:
Information on related-party transactions: these involve entities with a relationship of control or significant influence, such as group companies or shareholders. Transactions may include sales, loans, services and asset transfers.
Related-party transactions involving the income reduction for intangible assets: a tax incentive that allows companies to reduce their taxable base through the amortisation of intangibles such as patents, trademarks and copyrights.
Transactions with jurisdictions considered tax havens: countries or territories offering significant tax advantages, such as very low or zero tax rates, and often lacking transparency in regulation.
Anguilla, Antigua and Barbuda, Bahrain, Bermuda, Dominica, Fiji, Gibraltar, Guernsey, Grenada, Isle of Man, Cayman Islands, Cook Islands, Falkland Islands, Mariana Islands, Solomon Islands, Turks and Caicos Islands, British Virgin Islands, United States Virgin Islands, Jersey, Mauritius, Montserrat, Macao, Palau, Principality of Liechtenstein, Principality of Monaco, Republic of Nauru, Republic of Vanuatu, Hashemite Kingdom of Jordan, Republic of Lebanon, Saint Vincent and the Grenadines, Saint Lucia, Samoa, American Samoa, Seychelles, Sultanate of Brunei, and Vanuatu.
You can check the countries classified as tax havens here.
Deadline: Until the 30th of November of the year following the relevant tax period. Filing is annual.
Format: Exclusively electronic.
Method: Online filing through the Tax Agency’s electronic office.
Failure to file, or late filing of, Form 232 constitutes a tax infringement and may result in financial penalties:
General Penalty: For failure to file or late filing, the penalty is €10 per item or set of items relating to the same person or entity that ought to have been included in the return, with a minimum of €150 and a maximum of €10,000.
Penalty for Late Filing: If filing takes place within the period set by the Tax Administration following a requirement by them, the penalty may be increased to €20 per item, with a minimum of €300 and a maximum of €20,000.
Separation of Returns: Income and payment transactions must be declared separately, with no offsets.
Separate Records: Transactions of the same type using different valuation methods must be reported in separate records.
Exceptions: Certain exceptions apply to transactions carried out within tax groups or by AIEs and UTEs.
Form 232 increases the complexity of reporting obligations, expanding the scope of transactions to be disclosed compared with the former Form 200 linked to Corporation Tax. This form ensures that transactions are conducted at arm’s length, thereby contributing to correct taxation and the prevention of tax avoidance practices.
It is essential for us to provide our clients with clear guidance on how to comply with these obligations and avoid penalties. Proper filing of the form is crucial for responsible and transparent tax management.
We also provide you with an annual tax calendar, which you can check out via this link.
We're here to help! Contact us if you have any questions regarding Form 232.