At Employing In Spain, we understand the complexities of fiscal obligations for international companies with employees in Spain. One crucial requirement that companies must fulfill is the submission of the Related Parties Transactions Report, also known as Tax Form 232.
In this article, we will provide you with all the necessary information about this report and its significance for your business.
Tax Form 232 is a report that companies are required to submit in November to disclose their related party transactions.
This report aims to enhance transparency and prevent tax avoidance by ensuring that transactions with related parties are properly documented and reported.
The report must be submitted if any of the following conditions are met:
Exceeding the Transaction Threshold: If the sum of transactions with a related party exceeds 250,000 Euros, it must be reported.
Proportion of Related Party Transactions: If the overall amount of related party transactions of the same type exceeds 50% of the company’s 2019 turnover, it is mandatory to report.
Specific Transactions: Special rules apply to sales/purchases of patents, shares, business, and real estate. If the transactions of these types reach a threshold of 100,000 Euros, they must be reported.
In Spain, related parties are defined as:
In this example, the transactions with party A must be reported since their combined value exceeds 250,000 Euros. However, the transactions with party B do not need to be reported as they do not reach the threshold.
In this scenario, all sales transactions with parties A, B, and C must be reported since their total value exceeds 50% of the company’s 2019 turnover. Additionally, the loan transaction with party B must also be reported as the overall transactions with party B exceed 250,000 Euros.
At Employing In Spain, we understand the complexities and implications of related party transactions.
Our team of experts is here to assist you in navigating the reporting requirements and ensuring compliance with tax regulations.
Contact us today to schedule your appointment with our professionals, who can help you meet your employment goals and objectives.