Jun 25, 2024 | Tax Flash
Considering the actual relevance of the Transfer Pricing topic, from our Transfer Pricing department, we would like to inform you that we have recently observed an increase in inspections in this area, as a key point in the inspection processes of Corporate Tax by the Tax Authority.
Therefore, compliance with transfer pricing regulations is crucial, not only to avoid penalties but also to ensure fiscal efficiency and transparency in all transactions between related entities, both domestic and international.
With Arely Almaguer as the head of the transfer pricing department, bringing international experience, Audiconsultores ETL GLOBAL is at your disposal to provide strategic advice to identify opportunities for tax optimisation with robust compliance documentation and risk identification, as well as the development of well-founded transfer pricing policies in the event of any inspection by the authority.
Jun 4, 2024 | Tax Flash
The General Directorate of Taxes (DGT) has admitted, in its binding consultation V0010-24 dated 13 February 2024, that a loan granted to non-tax resident individuals in Spain to acquire a property in Mallorca is deductible in their Wealth Tax, even if said loan comes from an English financial institution.
In the analysed case, the non-tax resident individual acquired a property located in Mallorca financing the operation with a personal loan from a Spanish bank, and is considering refinancing this loan with a personal loan from an English bank since they offer more favourable conditions.
Thus, the DGT concludes that, to the extent that the first loan was deductible due to its purpose (the acquisition of a real estate located in Spain) and provided this is evidenced by any valid means in law, the new loan will also be deductible for the same reason. This conclusion would be applicable regardless of the type of loan granted by the financial institution, as it would ultimately have been dedicated to financing the acquisition of the property in Spain.
Access the full binding consultation HERE
May 23, 2024 | Tax Flash
The Spanish Central Economic-Administrative Court (TEAC), in its resolution dated 20 March 2024, confirms the non-deductibility of expenses in property leases by taxpayers residing in non-EU countries. This decision considers that the fact that the special rule on the deductibility of expenses and the reduced tax rate of 19% only apply to residents of the EU and the European Economic Area do not imply an incompatibility of the Spanish legislation with European Union Law nor a possible violation of constitutional principles.
Access to the full resolution HERE
May 9, 2024 | Tax Flash
The Central Tax Court (TEAC), in its decision dated 20 March 2024, has reiterated, in line with previous resolutions, that the income obtained by a resident in Germany from the lease of a property located in the Spanish territory is subject to taxation in Spain, without entitled the non-resident taxpayer to benefit from the reductions provided for in the Personal Income Tax Law (specifically, the 60% reduction for being a residential lease).
We will be attentive to confirm if this criterion, which is certainly questionable, is modified if this case reaches the Courts of Justice.
Access to the full resolution HERE
May 2, 2024 | Tax Flash
In a decision dated 22 February 2024, the Central Tax Court (TEAC) has stated that the Spanish Tax Authorities lack the authority to make an individualised request for information to an entity that, not being established in Spain and not having any link or connection criterion with the Spanish territory that would determine the existence of a legal-tax relationship, is not subject to the Spanish domestic legal system.
In these circumstances, obtaining information from those entities must be channelled through mutual assistance instruments related to the exchange of information.
Access the full decision HERE
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.
