STORIES

8 January, 2019

The Spanish Supreme Court criterion on the penalties applying due to the formal obligations noncompliance in related party transactions

In a recent Court Resolution of 15 Oct. 2018, the Spanish Supreme Court holds the view that, when the specific Corporation tax penalty system does not apply because the taxpayer is exempt from such documentation, the general penalty system ruled out in the General Tax Law applies.

Penalties applying for the noncompliance of the documentation requirements that taxpayers are subject to, in order to substantiate the agreed consideration in related party transactions, are specifically ruled in the Spanish Corporation tax Law.

In a recent Court Resolution of 15 Oct. 2018, the Spanish Supreme Court holds the view that, when the specific Corporation tax penalty system does not apply because the taxpayer is exempt from such documentation, the general penalty system ruled out in the General Tax Law applies. Such system provides a minimum penalty of 50% of the unpaid tax, when the infringement consists in not paying the tax quote deriving from the correct tax liquidation, within the legal term.

✔ The specific penalty system of the Spanish Corporation tax Law sets that, in the event that the documentation requirement has correctly been complied with and the taxpayer has declared according to the value derived from such documentation but the Spanish tax authorities adjust the valuation contained therein, the underpaid tax quote because of such adjustment is not considered as a tax infringement and cannot, therefore, be penalised.

✔ In its Court resolution of Oct. 15, 2018, the Spanish Supreme Court determines that, when there is an obligation to value related party transactions at arm’s length, nothing prevents the Spanish tax authorities, if the normal market value assigned to a transaction is incorrect, from adjusting the valuation and imposing a penalty to the taxpayer.

In the case analysed by the Supreme Court, the documentation requirements do not apply since the consideration of the transactions undertaken in the fiscal year does not exceed 250,000.00 € of market value. Consequently, what is at stake is whether the taxpayer can be penalised for the underpaid tax, when it was not obliged to comply with the documentation requirements.

✔ The Supreme Court concludes that the exemption from liability foreseen in the Spanish Corporation tax Law only applies when the following conditions are met:

  • The taxpayer has complied with the documentation requirements.
  • The declared value coincides with the one included in the related party transaction documentation.
  • The normal market value has been adjusted by the Spanish tax administration.

In the rest of the cases; that is to say, when the specific Corporate tax Law penalty system does not apply because the taxpayer is not obliged to the documentation requirements, then the general penalty system ruled out in the General tax law is applicable, what is more harmful for the taxpayer.

CONTACT

MADRID
Pedro Teixeira 8, planta 4ª, 28020
T+34 91 192 21 22

MAP

BARCELONA
General Mitre 28-30 08017.
T+34 93 363 65 10

MAP

Based in Barcelona and Madrid. Englobally is our Latin American business partner established in Santiago de Chile.

We are also part of Englobally Group, an international association of independent accounting and advisory firms that provide a one-stop shop managed solution for accounting, payroll and HR needs, with member firms in over 25 countries and associates working in many others. Many fast growing technology and lifescience businesses find their international services invaluable. Companies in many other sectors are attracted by the close and supportive way Englobally Group works.

Name

E-mail

Message

Please type the code below

captcha

  • Este sitio web utiliza Cookies de terceros y de análisis, para recopilar información con la finalidad de mejorar nuestros servicios, así como para analizar sus hábitos de navegación. Si continúas navegando, supone que aceptas expresamente la instalación de las mismas. Tienes la posibilidad de configurar tu navegador pudiendo, si así lo deseas, impedir que sean instaladas en tu dispositivo, aunque deberás tener en cuenta que dicha acción podrá ocasionar dificultades de navegación de la página web.

  • De conformidad con lo establecido en la normativa vigente en materia de Protección de Datos de Carácter Personal, le informamos que sus datos serán incorporados al sistema de tratamiento titularidad de PROFESSIONAL BOOKKEEPING SERVICES S.L. con CIF B59830638 y domicilio social sito en RONDA DEL GENERAL MITRE 28 08017, BARCELONA, con la finalidad de atender sus consultas. En cumplimiento con la normativa vigente, PROFESSIONAL BOOKKEEPING SERVICES S.L. le informa que sus datos serán conservados durante el plazo estrictamente necesario para cumplir con las acciones mencionadas con anterioridad.

    Salvo comunicación contraria por su parte, entenderemos que sus datos no han sido modificados, que usted se compromete a notificarnos cualquier variación respecto de los mismos, y que usted da su expreso consentimiento para que PROFESSIONAL BOOKKEEPING SERVICES, S.L. utilice los mencionados datos para las finalidades mencionadas.

    PROFESSIONAL BOOKKEEPING SERVICES S.L. le informa que procederá a tratar los datos de manera lícita, leal, transparente, adecuada, pertinente, limitada, exacta y actualizada. Es por ello que PROFESSIONAL BOOKKEEPING SERVICES S.L. se compromete a adoptar todas las medidas razonables para que estos datos se supriman o rectifiquen sin dilación cuando sean inexactos.

    De acuerdo con los derechos que le confiere la normativa vigente en materia de protección de datos podrá ejercer los derechos de acceso, rectificación, limitación de tratamiento, supresión, portabilidad y oposición al tratamiento de sus datos de carácter personal, así como del consentimiento prestado para el tratamiento de los mismos, dirigiendo su petición a la dirección postal indicada más arriba o al correo electrónico info@pbs.es.

    Podrá dirigirse a la Autoridad de Control competente para presentarla reclamación que considere oportuna.

    El envío de estos datos, implica la expresa aceptación de esta cláusula.

  • Pursuant to current Personal Data Protection Regulations, you are hereby informed that your data will be included in a processing system owned by PROFESSIONAL BOOKKEEPING SERVICES S.L. with Tax ID No. B59830638, with its registered address at RONDA DEL GENERAL MITRE 28, 08017 BARCELONA (SPAIN), in order to deal with your questions and requests. In compliance with current regulations, PROFESSIONAL BOOKKEEPING SERVICES S.L. hereby informs you that your data will be kept for as long as is strictly necessary to complete the aforementioned action.

     

    Unless otherwise stated, we will consider that your data have not been modified, that you undertake to inform us of any modifications thereto, and that you give your express consent for PROFESSIONAL BOOKKEEPING SERVICES, S.L. to use said data for the specified purposes.

     

    PROFESSIONAL BOOKKEEPING SERVICES S.L. informs you that it will proceed to process your data in a lawful, loyal, suitable, relevant, limited, exact and updated manner. Therefore, PROFESSIONAL BOOKKEEPING SERVICES S.L. undertakes to apply all reasonable measures to ensure that any incorrect data are deleted or corrected without delay.

     

    According to the rights granted to you under current data protection regulations, you will be entitled to exercise your rights of access, rectification, limitation on processing, suppression, portability or opposition regarding the processing of your personal data and your consent to the same, by addressing a written request to the postal address provided above or to the email address info@pbs.es.

    By sending these data, you are expressly accepting this clause.