The Order HFP/1978/2016, dated December 28, establishes Form 231 for the Country-by-Country Reporting (CbCR) in compliance with the recommendations of the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan. This form is designed to assess risks related to transfer pricing policies within multinational groups, but it does not allow direct adjustments by the tax authorities.

Key Points:

• Country-by-Country Reporting: Spanish resident entities that are parent companies of multinational groups or subsidiaries of non-resident entities must submit this report, provided certain legal criteria are met.
• Annual Communication: Entities are required to report the identification and tax residency of the entity responsible for filing the Country-by-Country Report.
• Application: This requirement applies to fiscal periods starting on or after January 1, 2016.

The order also regulates the electronic submission of Form 231 and aligns with Directive (EU) 2016/881, which governs mandatory automatic exchange of tax information within the European Union.