For the €250,000 threshold on Spain's Modelo 232 for related-party transactions, do you count the taxable base, the amount including VAT or the total paid?

Many companies are unsure which figure to use when checking whether they exceed the threshold that triggers reporting of related-party transactions on Modelo 232 (Spanish informative return for related-party transactions). The question often arises in Spanish companies whose shareholder is non-resident and rents them a property, lends them money or invoices them for services. The answer is clear: you use the taxable base, i.e. the consideration excluding VAT, valued at market value.

The €250,000 threshold applies per related party

The limit comes from Article 18.3 of Law 27/2014 on Corporate Income Tax (Ley del Impuesto sobre Sociedades, LIS). It refers to the consideration for all transactions carried out with the same related person or entity, measured at market value. Article 13 of the Corporate Income Tax Regulations repeats this and refers to the Ministerial Order governing Modelo 232.

Therefore:

• All transactions in the tax period are added up separately for each related party.
• The threshold is not measured against the company's total turnover.

Why VAT is excluded

Output VAT (IVA) is not part of the price or the consideration. The seller collects it and pays it over to the Spanish Tax Agency, so it is neither income nor expense of the related-party transaction. Law 37/1992 on VAT defines the taxable base as the total consideration, including taxes levied on the transaction, except VAT itself. In addition, Article 18.14 LIS states that market value for Corporate Income Tax purposes is independent of other taxes.

Why the total paid does not count

What matters is the amount of the transactions for the period, not cash received or paid. This follows from the accruals principle in Article 11 LIS: income and expenses are recognised regardless of when payment is made or received. The total paid also distorts the figure for two reasons:

• It may include VAT.
• It may be reduced by IRPF withholdings (Spanish personal income tax), for example on invoices from shareholders acting as professionals.

That is why you should use the gross amount, before withholdings and excluding VAT.

Market value versus invoiced amount

The rules require the threshold to be calculated at market value. If the transaction is correctly priced, this will match the invoiced taxable base. If the agreed price departs from market value, market value must be used even if it differs from the invoiced amount.

Other points to bear in mind

When asked about Modelo 232, the Directorate-General for Taxation (Dirección General de Tributos) has declined to give an opinion, as tax forms fall within the remit of the Spanish Tax Agency (AEAT). Order HFP/816/2017, which approves the form, also sets out other cases with their own rules, such as certain specific transactions or those with tax havens. It is advisable to review it together with the AEAT's instructions in each specific case.