Starting from the tax period beginning January 1, 2016, companies in Bizkaia must submit Model 231, which reports country-by-country related-party transactions. The obligation does not affect a large number of companies, but it represents an important procedure for those required to file the Country-by-Country (CBC) report.
What is Model 231?
It is a regulation for country-by-country reporting of multinational enterprise groups, which must provide, each year and for every tax jurisdiction in which they operate, a set of data. This information includes, with respect to the tax period of the parent entity, in aggregate and by country, the following items (all in euros):
- Group gross revenue, distinguishing between revenue from related entities and third parties.
- Profit before corporate income tax or equivalent.
- Corporate income tax or equivalent, including withholding taxes incurred.
- Corporate income tax or equivalent, including withholdings.
- Amount of capital and other equity.
- Average workforce.
- Tangible assets and real estate investments, excluding cash and receivables.
- List of resident entities and their main activities.
- Other relevant information and explanations of the data provided.
Who Must File Model 231?
The Country-by-Country Information Declaration (CBC/DAC4) is mainly mandatory for all entities resident in Spain that are the parent entity of a group and are not simultaneously subsidiaries of another entity (resident or non-resident). Their total revenue must be equal to or greater than €750 million in the 12 months preceding the start of the tax period.
There is another case in which filing Model 231 is mandatory: for resident subsidiaries of a non-resident parent entity (which is not a subsidiary of another) or permanent establishments of non-resident entities. In this case as well, total revenue must meet or exceed €750 million in the year prior to the tax period.
Purpose of Model 231
EU Directive 2016/881 amended a previous directive on the mandatory automatic exchange of information for multinational taxation in 2016. Its annual submission aims to enable a global evaluation of transfer pricing risk to:
- Analyze risks of related-party transactions.
- Assist tax authorities in their oversight.
- Assess risks related to base erosion and profit shifting.
Companies required to submit Model 231 can do so from the day after the end of the tax period to which the information relates, up to 12 months afterward.
Model 231 Procedure
Entities required to file Model 231 in Bizkaia must identify themselves using an electronic certificate and submit it electronically via web services. The format and structure of the country-by-country report messages are specified by the Diputación Foral de Bizkaia, which has introduced several changes since 2016.
At IGN, we have implemented a system to simplify this procedure, aligning the content with the provisions of the Orden Foral, requiring only that the requested fields be completed.
As established by public administrations, the system sends the submission and receives a response message containing the list of accepted and rejected records, with reasons for rejection if applicable.
In the case of rejected entries, the program allows necessary corrections for resubmission, cancellation of a previous submission, and resending with the required changes. It also includes a simulation environment for testing before sending the final submission.
CbC Reporting 
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