Spanish companies performing transactions with entities or individuals that are resident in jurisdictions qualified by Spain as a tax haven are subject to strong transfer pricing documentation requirements.
We remind you that these documentation requirements apply regardless of whether the parties are tax-related or not and with almost no exceptional cases.
✔Spanish transfer pricing documentation requirements apply to transactions carried out with entities or persons resident in a tax-haven jurisdiction.
These transactions do not benefit from the general exception to the transfer pricing documentation requirements, whenever all the transactions carried out with the same tax-related entity or person in a given fiscal year do not exceed the overall limit of 250,000.00 Euro, even if they are of a different nature and subject to different methods to determine the arm’s length value.
✔ An additional requirement is set for transactions undertaken with entities or individuals resident in a tax-haven country and it is the identification of the persons intervening in the name of the entities / individuals resident in the tax-haven jurisdiction as well as the identification of the Directors of such entities.
✔ In the event of tax-related parties, the documentation does not need to be kept if they are tax resident in a EU country or in the European economic area providing there is an effective exchange of information with the relevant jurisdiction. In addition to it, it is necessary to prove that the undertaken transactions are based on sound economic reasons and that the non-resident entities carry on economic activities.
Finally, the specific documentation requirements applying to Spanish taxpayers shall not apply to international sales and purchases of stock and services (including intermediary commissions and related expenses) carried out with unrelated individuals / entities resident in a tax-haven jurisdiction, when the taxpayer can prove that the transaction was undertaken for sound economic reasons, that it performs similar transactions with entities or individuals not tax-resident in a tax-haven country and that the agreed consideration is arm’s length.
✔ The siege on tax-haven territories continues, this time in transfer pricing matters.