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Spain: New transfer pricing documentation requirements become applicable to MNEs


Mario Ortega

Rocio Madero

The Spanish Corporate Income Tax Regulations (CITR) approved in July 2015 introduced, among others, several amendments in the area of transfer pricing documentation. These changes are a result of the tax authority's efforts to align Spanish regulations with the guidelines established for the documentation of intragroup transactions by the OECD in Action 13 of the BEPS Action Plan.

On the one hand, these amendments considerably reduce the documentation to be prepared by small and medium entities, while, on the other, they increase the transparency requirement for multinationals, which leads to an increase in the information to be included in their transfer pricing documentation.

The CITR entered into force on January 1 2015. One of the final provisions provided that, in the case of entities whose net turnover was over €45 million ($48 million), the documentation requirements imposed under Articles 19 and 20 of the previous regulations would continue to be in force for a further year.

Therefore, the new documentation requirements imposed under Articles 15 and 16 of the CITR are fully applicable, for the first time, to those multinationals (entities whose net turnover is over €45 million) whose tax periods begin on January 1 2016. Thus, such new documentation will have to be prepared throughout 2017.

According to Article 15 of the CITR, the documentation relating to the group must include:

  • Information on the structure and organisation of the group, such as a general description of the organisational, legal and transactional structure;

  • Information on the group's activities, such as the main sources of income and the supply chain of goods and services representing at least 10% of the group's turnover;

  • Information on the group's intangibles, such as a general description of the transfer pricing policy regarding those assets;

  • Information on financial activity, such as a general description of the group's financing methods or a description of its transfer pricing policy; and

  • Information relating to the financial and tax position of the group, such as the annual financial statements and details regarding any advanced pricing agreements (APA) or analogous procedures involving the group and the tax authorities.

Pursuant to Article 16 of the CITR, the taxpayer's documentation must include:

  • Information on the taxpayer, such as the management structure, description of the activities pursued by the taxpayer, its business strategy or its main competitors;

  • Information on related-party transactions, such as a detailed description of the nature, characteristics and amounts of related-party transactions, a comparability analysis, the valuation method chosen, comparables obtained and the resulting value or range of values; and

  • Economic and financial information from the taxpayer, such as the reconciliation between the data used in order to apply the transfer pricing methods and the annual financial statements or the financial data of the comparables used.

Although some of these requirements were already in place for previous years (documentation obligations have been in force in Spain over the past seven years), certain others are new and will have to be prepared by taxpayers from scratch for the first time for fiscal 2016.

Given the importance of the amendments introduced, taxpayers in Spain should carefully update and review their transfer pricing documentation in order to meet the new compulsory requirements and avoid the imposition of the related penalties.

Mario Ortega ( and Rocio Madero (, Madrid



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