Spain: Spain set to introduce modifications to transfer pricing reporting requirements

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Spain: Spain set to introduce modifications to transfer pricing reporting requirements

calle.jpg

cuenca-miguel.jpg

Mario Ortega Calle


Teresa Cuenca Miguel

The Spanish government has recently published a draft Bill regarding corporate income tax regulations. Although it is still under parliamentary discussion, it is expected to be approved in the coming weeks. This draft Bill proposes significant changes to the existing legislation on controlled transactions, the most important of which are the introduction of country-by-country reporting (CbCR) obligations and the reinforcement of the transfer pricing documentation requirements.

New provisions are very much aligned with the latest developments coming from the OECD and its action plan aimed at tackling base erosion and profit shifting (BEPS).

CbCR obligations are to be introduced for Spanish-resident entities considered ultimate parent companies of a group, when the net revenues of such group within the previous 12 months amount to €750 million or more.

This information will be required from 2016 onwards, according to a specific template to be approved by the tax authorities that will accurately follow the recommendations published by the OECD.

In addition, from fiscal year 2018 onwards, Spanish tax authorities will be allowed to demand such information from any subsidiary located in Spain, owned directly or indirectly by a non-Spanish resident entity, provided the latter is not subject to similar requirements in its country of residence, or that there is no automatic information exchange agreement with the territory where it resides.

In connection with the specific transfer pricing documentation requirements, the draft Bill retains the existing double set of documentation – on the group to which the taxpayer belongs, and on the taxpayer itself.

Nonetheless, it adds a large number of new requirements, among which it is worth stressing that exhaustive information on the group's intangible assets and financing activities, comprising both internal and external strategies followed, as well as on its financial and tax positions, is demanded.

Entities belonging to groups with net turnover below €45 million in the preceding year will not be obliged to prepare the master file. Furthermore, taxpayers whose net turnover does not exceed such quantitative threshold could prepare a simplified local file.

However, information on certain specific transactions (for example, those performed with related entities by personal income taxpayers in the course of an economic activity, stock and business transfers, and transactions involving real estate and intangible assets) will not be excluded from the obligation to be reported, and the same will also not be able to be documented according to the simplified template.

It is also highlighted that an authorisation to re-characterise controlled transactions will be included, thus allowing the tax authorities to verify not only the price of such transactions, but also their real nature.

In light of the above, multinational groups operating in Spain should carefully consider how these incoming provisions are likely to impact their tax and transfer pricing policies as well as preparing to have the required information available.

Mario Ortega Calle (mario.ortega.calle@garrigues.com) and Teresa Cuenca Miguel (teresa.cuenca@garrigues.com)

Garrigues – Taxand, Madrid

Website: www.garrigues.com

more across site & shared bottom lb ros

More from across our site

If the Reform leader becomes UK prime minister then he may follow the direction of the US in at least one significant way
Trump declared a new national emergency in issuing the order; in other news, Grant Thornton Germany is up for sale and the subject of interest from both its UK and US counterparts
The judgment, which saw Denmark's Supreme Court rely on OECD TP guidance, sets aside more than 15 years of consistent administrative practice, experts have told ITR
Belgium’s new coalition government has gone ahead with a new exit tax regime that could land it in the courts
Brazil’s government has not officially framed the bill as a countermeasure amid trade tensions with the US, but the move is being considered as part of Brazil’s strategic response, one expert tells ITR
Understanding India’s income tax landscape can help charities ensure compliance, optimise tax benefits, and enhance their impact, writes Raghav Bajaj of Khaitan & Co
Tax advisers in Brazil are rising above the country’s notoriously complex tax system to deliver high-quality advisory services, ITR’s exclusive in-house data reveals
ITR’s data has highlighted the US firm’s ambition to become America’s ‘premier’ tax player via a concerted partner recruitment strategy
Jaap Zwaan’s arrival continues a recent streak of A&M Tax investing in the region; in other news, the US and Japan struck a deal that significantly lowered tariff rates
In a world where international tax concepts rely on human activity, Leonard Wagenaar poses existential questions about the future of such ideas when AI is ever-present
Gift this article