TRANSFER PRICING
As corporate groups and their operations become more complex, tax rules governing transfer prices and the valuation of related party transactions have increased and have gotten more complicated. Actually, the current scope of transfer pricing rules does not only comprise corporate transactions, but also many situations involving individual vis-à-vis companies and other individuals.
From a tax audit and litigation point of view related party transactions and transfer pricing adjustments are becoming a principal area of controversy and the main basis of many tax assessments. Mandatory transfer pricing documentation applies in Spain since 2009.
Spanish corporate tax legislation foresees the options to reach binding advanced pricing agreements (“APA”) and other rulings between taxpayers and the Tax Authorities. Although reaching a binding APA can be a long process, where an agreement of this kind is in place, the grounds for discussion, uncertainty and contingency with the inspectors on this basis are negligible.
Our tax team can advise and assist our clients in substantiating, documenting and negotiating binding APA with the Tax Authorities. Our extensive expertise in transfer pricing provides substantial savings to our clients by permitting them to take advantage of the opportunities that related party transactions and transfer pricing rules can offer. This is achieved by effectively utilizing group tax incentives and credits such as, for example, the patent box regime provided by the corporate income legislation.