Spanish Regulations on Related-Party Transactions

This document delves into Spain’s transfer pricing policies, offering insights into how related-party transactions are managed in the country.

Applying International Guidelines

Spain aligns its transfer pricing regulations with international standards, particularly the OECD Transfer Pricing Guidelines and EU Joint Transfer Pricing Forum recommendations. While these are essential, they must not contradict Spanish laws and regulations.

Broad Definitions

Related parties in Spain have a broad definition that encompasses various scenarios, including shareholding, group relationships, and cross-border activities. This definition helps ensure that most related-party transactions are adequately addressed.

Simplified Documentation for SMEs

Spain offers simplified transfer pricing documentation regimes for small and medium-sized enterprises (SMEs) based on their annual turnover. These SMEs have more straightforward requirements, making compliance easier for them.

Approach to Tax Havens

Spain categorizes certain jurisdictions as non-cooperative low-tax jurisdictions or tax havens. Transactions with entities in these areas are subject to strict rules and limitations to prevent tax erosion.

Transfer Pricing Audits

Spanish tax authorities prioritize transfer pricing scrutiny during audits, particularly for high-value intangibles, intra-group services, and corporate restructuring transactions. Rigorous reviews help ensure compliance.

Documentation Requirements

Transfer pricing documentation is a crucial part of related-party transactions in Spain. Specific content and formats are outlined, with the Masterfile and Local file being central components.