What is meant by linked operation?
In order to prepare model 232 regarding related-party transactions, it is important to understand that a related transaction is an operation to purchase goods and services made between natural and legal persons with some type of relationship. Operations between entities of the same business group or between the company and its partners, its administrators or their direct relatives.
Related-party transactions between related persons or entities will be valued at their market value. Market value is understood as that which would have been agreed upon by independent persons or entities in conditions that respect the principle of free competition.
Article 18 of Law 27/2014 of November 27, of the IS specifies that the following persons or related entities must be considered:
1. An entity and its partners or participants.
2. An entity and its directors or administrators, except for the remuneration for the exercise of their functions.
3. An entity and the spouses or persons united by kinship relations, in direct or collateral line, by consanguinity or affinity up to the third degree of the partners or participants, directors or administrators.
4. Two entities that belong to a group.
5. An entity and the directors or administrators of another entity, when both entities belong to a group.
6. An entity and another entity invested by the first indirectly in at least 25 percent of the share capital or equity.
7. Two entities in which the same partners, participants or their spouses, or persons united by kinship relations, in direct or collateral line, by consanguinity or affinity up to the third degree, participate, directly or indirectly, in at least the 25 percent of the share capital or own funds.
8. An entity resident in Spanish territory and its permanent establishments abroad.
Who is obliged to present model 232?
It is mandatory to present model 232 when transactions are carried out with related entities (or persons) if any of the following features are present:
1. Set of operations performed in the tax period
1. if the set of operations of the same type and method of valuation exceeds 50% of the turnover of the entity
2. if it exceeds the € 100,000 limit in any of the types of the so-called specific operations.
1. Transactions with individuals who pay in objective estimation that the individual or jointly with their family members is equal to or greater than 25% of the capital or equity and in objective estimation (modules)
2. Transfer of business, securities or shares in the equity of entities not admitted to trading or admitted to tax havens
3. Transfer of real estate and operations over intangibles
2. Transactions carried out in the tax period with the same person or entity
1. The volume of transactions with the same person or related entity exceeds € 250,000 per year
• When an entity benefits from the reduction of the Patent Box regime for transactions with related persons or entities
In addition, the model must be presented when operations are performed or securities are held in tax havens.
And in those operations in case of application of the reduction of income from certain intangible assets “the taxpayers who apply the aforementioned reduction in article 23 LIS because they obtain income as a result of the assignment of certain intangibles to related persons or entities”
What operations are excluded from submitting Model 232?
1. Those operations of the same group of fiscal consolidation. There are certain information obligations in the operations of the Patent Box regime.
2. Those operations carried out with its members or other entities that are part of its consolidation group AIES (economic interest groups) or the UTE (temporary unions of companies). If they must present the model, the UTEs that benefit from the exemption regime for income obtained abroad through EP.
3. Transactions carried out in the field of OPA (public offer of purchase) or of an OPV (public offer of sale)
Forms of presentation
Must be done electronically, may be done through the electronic headquarters of the AEAT.
Deadline for submission
It will be presented in the following month, ten months after the conclusion of the tax period to which the information to be supplied refers (at the latest on November 30).
What sections does the model consist of?
1. Transactions with related persons or entities
1. Person to person and entity to entity are informed.
2. Payments and payments are reported separately, they can not be compensated.
3. The following data must be completed
1. The identifiers of the related party with which the operation is carried out
2. The type of link between both parties
3. Type of operation
4. If it is income or is payment
5. The valuation method
6. The amount of the operation
2. Transactions with related persons or entities in case of application of the reduction of income from certain intangible assets.
The following information must be included one.
1. Identifying data
2. Type of link
3. Amount before applying the reduction, VAT excluded.
2. Operations and situations related to countries or territories qualified as tax havens.
1. In relation to operations related to countries or territories qualified as tax havens.
1. Description of the operation
2. The service expenses corresponding to operations carried out with residents in tax havens
3. Investments made in tax havens
4. Identifying data
5. The amount of expenses, operations or investments.
2. In relation to the holding of securities related to countries or territories qualified as tax havens.
1. Type of situation
2. Entity invested or issuer of the securities
3. The identification of which tax haven they are in
4. Acquisition value
5. Percentage of participation
For more information, contact your tax, accounting and labor expert at Odoo with GAFIC.
GAFIC accounting advisory Odoo in Madrid and Barcelona