Advanced corporate tax obligations: related-party transactions (232) and income attribution (184)

These are 3 lesser-known tax duties affecting companies and entities, and failing to comply with them generates penalties or liability for third-party debts. They have nothing to do with each other except that they usually go unnoticed until Hacienda (the Spanish tax authority) asks.

Form 232 is an informative return of the transactions your company carries out with related parties (partners, directors, their relatives or companies in the same group) and with tax havens. Form 184 is filed by entities under the income attribution regime (joint ownerships, civil partnerships without commercial purpose and dormant inheritances), which do not pay taxes themselves but distribute their income among their members. The certificate under article 43.1.f of the Ley General Tributaria (General Tax Act) is the document that prevents you from being held liable for the tax debts of your contractors and subcontractors.

Managora identifies which ones apply to you, calculates the thresholds, prepares the transfer pricing documentation and files each form on time. You can see the price of each service on the page for Form 232, Form 184 and the contractor certificate.

Taxpayers of Corporate Income Tax and Non-Resident Income Tax with a permanent establishment who carry out transactions with related persons or entities (article 18.2 of Ley 27/2014) above certain thresholds are obliged to file.

You must declare when the total transactions with the same related person or entity exceed €250,000 at market value in the financial year. Also, regardless of that amount, when the so-called specific transactions of the same type exceed €100,000, or when transactions of the same type and valuation method represent more than 50% of the entity's turnover. Specific transactions include, among others, those carried out with natural persons under the objective estimation system with a participation equal to or greater than 25%, the transfer of businesses or unlisted shares, and transactions involving real estate and intangibles.

Furthermore, it must always be filed when there are transactions or holding of securities in tax havens (regardless of the amount) or when the reduction of income from intangibles (patent box) is applied with related parties. Tax groups, economic interest groupings and temporary joint ventures (UTE) are excluded. Along with the form, the law requires keeping the transfer pricing documentation that justifies that these transactions were valued at market price. Managora prepares both.

Form 184 is an annual informative return for entities under the income attribution regime: joint ownerships, civil partnerships without commercial purpose, dormant inheritances and other entities without legal personality under article 35.4 of the Ley General Tributaria (General Tax Act). These entities do not pay tax on their profits: they report the income obtained and the part attributed to each partner, co-owner, heir or participant, who will then include it in their own Personal Income Tax, Corporate Income Tax or Non-Resident Income Tax.

Every attribution entity carrying out an economic activity must file it, regardless of the amount of its income. If it does not carry out an economic activity (for example, a joint ownership that only rents out a property), it is only obliged when it obtains income exceeding €3,000 per year.

Be careful with civil partnerships: since 2016, those with a commercial purpose pay Corporate Income Tax (Form 200) and do not file Form 184. Managora checks which of the 2 regimes your entity falls under before filing anything.

When you contract or subcontract works or services corresponding to your main economic activity, article 43.1.f of the Ley General Tributaria (General Tax Act) makes you subsidiarily liable for the tax debts of the contractor or subcontractor, regarding the part of taxes that must be passed on (VAT) or withheld (Personal Income Tax withholdings) for that work or service. If the subcontractor does not pay these amounts, Hacienda can claim them from you.

The law offers an escape route: this liability will not be enforceable if the contractor or subcontractor gives you a specific certificate of being up to date with their tax obligations, issued by the AEAT (the Spanish tax agency) during the 12 months prior to the payment of each invoice. The liability is limited to the amount of the payments made without that certificate, or after 12 months have passed without renewing it.

The certificate is requested from the AEAT by the person who is going to be hired (the contractor or subcontractor), who then gives a copy to the payer. The Agency issues or denies it within 3 working days: if it does not resolve within that period, the certificate is understood to be issued in favour of the applicant (positive silence) and the payer is equally covered regarding payments for the following 12 months. Its validity is 12 months. Managora takes care of requesting it, renewing it and archiving the copy of each invoice, so that you are always covered.

Each obligation has its window: Form 232 is filed in the month following the 10 months after the end of the financial year, which for companies with a calendar year means from 1 to 30 November. Form 184 is filed from 1 to 31 January of the following year. The contractor certificate does not have a fixed date: it is requested when you are going to hire and is renewed before the 12 months expire.

Forms 232 and 184 are informative returns: filing them late, with incomplete or inaccurate data is penalised according to the Ley General Tributaria (General Tax Act) regime for this type of return, with fines for each piece of data or set of data and with minimum and maximum amounts. Filing voluntarily, before Hacienda requires you to do so, reduces the penalty by half.

Managora monitors the calendar for you and notifies you before each deadline. The exact amounts for each service are listed on the corresponding procedure pages.