Transfer Pricing Regime in Spain

February 23, 2021

Transfer prices are those prices or considerations agreed for operations carried out between related parties, which are commonly referred to as intercompany transactions.

In Spain, the rules on transfer pricing are regulated in Article 18 of Law 27/2014 (the Law) or “Corporate Income Tax Law” and its Regulations. The purpose of this article is to disclose the main aspects of this regime.

Full Competition Principle

This is the principle that governs transfer prices, also known as the “arm’s length” principle, it consists in that the prices agreed between related entities are at market value, i.e. as if they had been agreed by independent third parties.

This is regulated in the Spanish legislation, in numeral 1, of Article 18 of Law 27/2014 or “Corporate Income Tax Law”.

Related Parties: Definition

The following shall be understood as related persons or entities:

  • The partners or participants in relation to the company.
  • The entity in relation to its administrators, with the exception of the remuneration received by them for the exercise of their functions.
  • The entity and the spouses or persons with kinship relationship, either in direct or collateral line, by consanguinity or affinity up to the third degree with respect to the partners or administrators.
  • Two entities when they belong to the same group.
  • One entity in relation to the administrators of another, provided that the latter belong to the same group.
  • One entity in relation to the other, when the former indirectly owns at least 25% of the capital of the latter.
  • Two entities which share the same partners or participants, or their spouses or related persons as indicated in point three, and these participate directly or indirectly in at least 25% of the capital.
  • A company resident in Spain in relation to its permanent establishments abroad.

Transfer Pricing Information Affidavit

Spanish transfer pricing legislation provides for an informative declaration of related-party transactions and transactions related to tax havens.

The following taxpayers are obliged to file such declaration:

  • Those who carry out transactions with the same related party, provided that the total amount of the consideration exceeds €250,000.
  • Those who have carried out specific transactions provided that the total amount of each of these types of transactions in the tax period exceeds 100,000 euros.

However, in case transactions are carried out with entities resident or domiciled in territories considered as tax haven, the tax return must be filed regardless of the amount of the transaction.

The declaration shall be filed through Form 232 before the Tax Administration, until the following month after a period of 10 months from the end of the fiscal year.

Transfer Pricing Documentation

Taxpayers obliged to transfer pricing must keep documentation in order to verify that the operations are in accordance with the arm’s length principle.

Standardized Document

Those persons or entities that do not exceed ten million euros may file a standardized document in order to comply with the specific documentation required by the aforementioned regulation.

Simplified Taxpayer Document

This document must be filed by those taxpayers whose net turnover is greater than 10 million euros but less than 45 million euros. The information required will include a description of related operations, tax identification of the related party, identification of the valuation method and methods used.

Specific Taxpayer Documentation

Those taxpayers whose turnover exceeds 45 million euros, which includes permanent establishments of non-resident entities, must submit this document. This must include information on the structure of the Company, economic activity and details of related operations.

Group Documentation

It must be submitted by those taxpayers that exceed the threshold established for the Specific Documentation. However, the information to be submitted must be that of the group structure.

Country by Country Information

Spanish legislation has incorporated the third level of documentation established in Action 13 of the BEPS (Base Erosion and Profit Shifting) Plan of the Organization for Economic Cooperation and Development (OECD), for multinational groups.

In this way, Article 14 of the Regulation states that the following will be obliged to file it:

  1. Entities resident in Spain that are the parent company of the group.
  2. Entities domiciled in Spain, directly or indirectly dependent on a company not domiciled in Spanish territory, which in turn is not dependent on another company, provided that:
    • There is no country-by-country reporting obligation or its analogous in the country of residence of the foreign entity.
    • There is no information exchange agreement with the country in which the foreign entity resides.
    • That the aforementioned agreement has been systematically breached and that the Spanish Tax Administration has informed its subsidiaries.

However, the group member entity will not be obliged to file this report when the multinational parent company has appointed another member entity as a representative parent company, provided that the latter is resident in the European Union.

The deadline for filing this report is twelve months after the end of the tax year.


Failure to comply with the formal transfer pricing obligations, such as the filing of the informative affidavit, will result in an infringement with a penalty of 1,000 euros for each omitted, inaccurate or false data and 10,000 euros for each set of data.