Apr 18, 2024 | Tax Flash
The mandatory transfer pricing documentation is subject to those transactions carried out with a related party that exceed in aggregate terms €250,000 in a single tax year. In this respect, it should be noted that transfer pricing documentation for the tax year 2023 may be required as of the corporate income tax filing date for the tax year 2023 (25 July 2023).
- The purpose of the documentation is to defend that the prices established in the related transactions are consistent with the arm’s length (or market) principle, through the preparation of a “Local File” or, if applicable, a “Master File”, in compliance with Art. 18 of the LIS and Art. 15 and 16.4 of the RIS.
- On the other hand, we could also support you in the definition of the transfer pricing policy, in which the transactions are documented according to their nature and the market value is determined, considering the support with the preparation of contracts between related parties.
Currently, the Spanish tax administration has increased its transfer pricing inspections, concentrating its efforts on a new automated transfer pricing risk analysis system, reviewing compliance with this documentation obligation, as well as the maintenance of existing transfer pricing policies. In the event of non-compliance with this obligation, the amount of the penalty could be significant.
In this sense, we would like to inform you that Audiconsultores ETL GLOBAL has the experience to support companies with the preparation of the required documentation, as well as with the determination of transfer pricing policies, with Arely Almaguer as head of the Transfer Pricing Department, whom you can contact directly for any advice or consultation in the application of a diagnosis and budget.
Apr 9, 2024 | Circulars
As you know, last April 3, the campaign for the Annual Individual Income Tax Return or Model 100 began.
In this circular, we review the following points to take into account:
- Obligated subjects
- Revision of tax information
- Completion of Model 100
- Deadlines of presentation
Access to full newsletter HERE
Feb 20, 2024 | Tax Flash
A recent Court decision from the Catalonian High Court of Justice (Tribunal Superior de Justicia- TSJ – case number 1947/2023) dated May 26, 2023 recently published analyses in depth the effective beneficiary issue in the royalty payments by a Spanish company to non-resident companies.
The TSJ ratifies the criterion that has been followed by the Tax Authorities and by other Courts in the last years, concluding that the tax exemption stated in the Spanish domestic legislation on royalty payments to entities resident in another EU country (article 14 of the Non-Residents Income Tax Law), is only applicable if the recipient is the effective beneficiary of the royalty.
Therefore, this exemption shall not be applicable if the recipient company is not the effective beneficiary of the royalty, but, for instance, a mere intermediary acting on behalf of other company which is tax resident outside the EU.
The exemption not being applicable in the case analysed, the TSJ concludes that the Spanish payer should have withheld the corresponding withholding tax in accordance with the applicable Tax Treaty between Spain and the country where the effective beneficiary is resident.
The same criterion stated in the Court decision would be applicable in the case of interest payments from a Spanish company to an EU or EEE company.
Access to the full judgment HERE
Jan 19, 2024 | Tax Flash
Yesterday the plenary of the Constitutional Court declared the unconstitutionality of Royal Decree-Law 3/2016, through which significant measures were introduced for the taxation of companies and tax groups. Specifically, the measures introduced in 2016 affected the following aspects of the Corporate Income Tax (CIT) settlement:
• Restrictions regarding the limits applicable to big companies for the set-off for the negative tax bases and deferred tax assets.
• The introduction of a new limit for big companies applicable to deductions to avoid double taxation.
• The obligation to automatically include impairments of shareholdings that had been deducted in previous years in the taxable base.
• Modification of the treatment of negative income derived from the transfer of shares in other entities.
This ruling will have an only impact on those taxpayers who had requested the rectification of their CIT self-assessments for previous tax years before the decision of the Constitutional Court was published.
For more information, you can consult the complete press statement from the Constitutional Court (in Spanish) HERE.
Dec 14, 2023 | Tax Flash
The National Audicence, in the statement dated May 31st 2023, has deemed that, in the transfer pricing adjustment carried out, the reference to the fact that the margins are excessively wide is not considered sufficiently expressive of the reasons that would justify the application of the median.
In the opinion of the NA, the rationale provided by the Tax Administration regarding the excessively wide margins is not considered sufficiently expressive of the reasons that would justify the application of the median in the manner expressed. Therefore, the Court has upheld the argument at this point and deemed appropriate the application of the lowest point of the arm’s length range determined by the Tax Administration.
Access to the full statement HERE
