Stricter Transfer Pricing Inspection

August 24, 2022

The Ministry of Finance has concentrated on the multinational groups, which increased tax regularizations, already warned in the Annual Tax and Customs Control Plan for 2022, specifically in transfer pricing policy. However, SMEs and family-owned companies have also been targeted for inspection. 

Multinational groups and SMEs

Multinationals in restructuring processes, with services or intangible assets which are difficult to value, with recurring absences of profits or complex financial structures, are the focus of most of the Finance Department’s attention. In addition, SMEs and family businesses are also being audited in inspections of professional partnerships, reviewing the remuneration and services of the partners, and analyzing the market value in the transfer of assets and financing operations of the companies to their partners. 

The global trend in international taxation

It is mandatory to comply with the global trend in international taxation, i.e., to follow the market value principle. In this sense, multinational groups must be taxed wherever they carry out their economic activity and generate value. Likewise, they should pay more attention to the search for comparables on the market value of related-party transactions, respecting the arm’s length principle.   

Therefore, all useful and understandable information should be maintained to allow taxpayers to verify the reasonableness and market logic of their internal operations, consistent with the business model and the value chain of the group to which they belong. 

Source: La Voz de Galicia 24/08/22