Worldwide transfer pricing reference guide 2014

Spain (continued)
Documentation requirements (continued)
There are some exemptions for documenting related party transactions:
• Exemptions by volume:
• For those corporate income tax taxpayers whose transactions carried out with the same related party do not exceed EUR250,000 at
market value (taking into account the total transactions carried out with the same related party)
• Entities whose net sales do not exceed EUR10 million in the period and relatedparty transactions do not exceed EUR100,000
(excluding the listed tax haven jurisdictions)
• Exemptions by transaction characteristics:
• Performed between entities within tax consolidation groups
• Performed between economic interest groupings or temporary business alliances, and their shareholders
• Carried out within the scope of an IPO
• Carried out between saving banks integrated in a vehicle approved by the Bank of Spain
Documentation deadlines
Documentation will have to be kept by companies once the corporate income tax return is filed.
Statute of limitations on transfer pricing assessments
A general statute of limitations of four years applies. The term will be interrupted in case of a tax audit. If a new income tax return is filed
with the tax authorities, the four year period is suspended and a new one begins.
Return disclosures/related party disclosures
Specific disclosure rules exist for transactions with tax havens, even with unrelated parties (as per a blacklist).
Transfer pricing–specific returns
The related party transactions have to be included in the Corporate Income Tax return. There are no specific transfer pricing returns for
tax payers.
Frequency of tax audit and transfer pricing scrutiny by the tax authority
The tax authorities have stated that transfer pricing audits will be a priority from 2009, particularly with regard to business
restructurings and intangible transactions.
The likelihood of an annual tax audit in general varies from one industry to the other and depends on the size of the taxpayer. Very large
companies (annual revenues in excess of EUR60 million) normally come under audit on a yearly basis, so the risk is high.
Risk of general audit for large companies (annual revenues from EUR6 million to EUR60 million) is medium, while the risk of audit for
others is low. However, the Spanish tax authority establishes its annual audit plans based on risk assessment on each taxpayer,
so companies for which risk factors apply may be exposed to an increased risk.
The likelihood that transfer pricing will be reviewed as part of an audit is high, if the taxpayer regularly enters into cross-border related
party transactions. For all other cases, the risk of a transfer pricing review during a general audit is medium.
Where the transfer pricing policy is under review, the risk that transfer pricing methodology will be challenged is high. In particular,
authorities are more often strongly challenging the comparability analysis, by applying the most recent OECD guidance on the nine step
process and interquartile range application.
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