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Spain: Consideration of related party transactions in the corporate income tax form

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Published on July 21, 2016

 

In Spain, information regarding the related party transactions has to be filed in the Corporate Income Tax Declaration (”Modelo 200”). This requirement is only mandatory for taxpayers who exceed the given thresholds. The non-compliance or the providing of incorrect information may attract the attention of the tax authorities and increases the risk of penalty payments. In the following we will summarize the most important questions.

 

1. When should the related party transactions be declared in the ”Modelo 200”

If the total amount of the operations with one related party exceeds the market value of EUR 250,000, all controlled transactions with the same related party must be declared, regardless of their individual amounts.
For example: In case a company performs 3 types of transactions with the same related party:

1. Sale of products = EUR 100,000
2. Purchase of products = EUR 60,000
3. Payment of interests = EUR 95,000
 
            • All 3 operations with the toal volume of EUR 255,000 have to be declared on different lines.
  • Specific transactions, which are carried out with the same related party (transactions of the same type and using the same valuation method), exceeding a threshold of EUR 100,000, should be declared. The following are considered specific transactions:
    • The transactions carried out by taxpayers subject to Personal Income Tax, in the case of an economic activity, to which the objective estimation method is applied, with those entities in which they or their spouse, ancestors or descendants, individually or together, hold a stake equal to 25% or higher of the equity or share capital;
    • The transactions involving transfer of business;
    • The transactions involving transfer of equity or shares representing the participation in the share capital of any entity not admitted to a negotiation process in any regulated market of securities, or admitted to a negotiation process in a regulated market of securities situated in countries or territories considered as tax haven;
    • The transactions involving immovable properties;
    • The transactions involving intangible assets;
    • The operations performed with entities located in territories considered tax haven.

For example: If a company has only one controlled transaction with a related party in the amount of EUR 105,000  and if this transaction has to be qualified as a specific transaction, this operation should be declared.

 

2. Which information has to be provided? 

The specific information regarding intercompany transactions that has to be provided in the ”Modelo 200” is as follows:
  • Tax identification number of the related company or natural person;
  • Information whether the related party is a natural person or company;
  • Name of the related natural person or business name of the related company;
  • Type of relationship;
  • Province/Country code of the related party;
  • Type of transaction;
  • Income/Payment;
  • Transfer pricing valuation method; and
  • Transaction amount (without VAT).

 

3. Which deadline has to be considered for declaration for Financial Year 2015?

The deadline for the declaration for the FY 2015 is on July 25, 2016 (July 26, 2016 in Madrid, Navarra, País Vasco, La Rioja and Galicia), if the taxpayer’s tax year matches the calendar year. If the FY does not match the calendar year, the deadline is 6 months and 25 days after the closing. 

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