Spain - Local Requirements – Aibidia

Source:

Corporate Income Tax Law (Law 27/2014 of 27 November 2014), Article 18
Corporate Income Tax Regulations (Royal Decree 634/2015 of 10 July 2015), Articles 13 to 17

Summary of local requirements

Strict Format: Not specified

Language: English, Spanish

To download the legislation in the original language, go to:

Local File

1.	The specific documentation of the taxpayer shall include: a) Information on the taxpayer: 1. Management structure, organization chart and persons or entities to which the reports on the evolution of the taxpayer's activities are addressed, indicating the countries or territories in which such persons or entities have their fiscal residence. 2. Description of the taxpayer's activities, its business strategy and, if applicable, its participation in restructuring operations or assignment or transfer of intangible assets in the tax period. 3. Main competitors
	b) Information on related transactions: 1. Detailed description of the nature, characteristics and amount of the related transactions. 2. Name and surnames or company name or full name, tax domicile and tax identification number of the taxpayer and of the related persons or entities with which the transaction is carried out. 3. Detailed comparability analysis, in the terms described in Article 17* of this Regulation. (Article 17: Determination of the market value of related-party transactions: Comparability analysis. 1. For the purpose of determining the market value that would have been agreed upon by independent persons or entities under conditions that respect the arm's length principle referred to in paragraph 1 of Article 18 of the Tax Law, the circumstances of the related transactions shall be compared with the circumstances of transactions between independent persons or entities that could be comparable. For this purpose, the relationships between the related persons or entities and the conditions of the transactions to be compared shall be taken into account, taking into account the nature of the transactions and the conduct of the parties. 2. In order to determine whether two or more transactions are comparable, the following circumstances shall be taken into account, to the extent that they are relevant and that the taxpayer has had reasonable information about them: a) The specific characteristics of the goods or services that are the object of the related transactions. b) The functions assumed by the parties in relation to the transactions under analysis, identifying the risks assumed and weighing, if applicable, the assets used. c) The contractual terms from which, if applicable, the transactions derive, taking into account the responsibilities, risks and benefits assumed by each contracting party. d) The economic circumstances that may affect the related transactions, in particular, the characteristics of the markets in which the goods are delivered or the services are rendered. e) The business strategies. Likewise, for the purpose of determining the market value that would have been agreed upon by independent persons or entities under conditions that respect the principle of free competition, any other relevant circumstance on which the taxpayer may have had reasonable information, such as, among others, the existence of losses, the incidence of the decisions of the public authorities, the existence of location savings, integrated groups of workers or synergies, should also be taken into account. 3. When the related transactions carried out by the taxpayer are closely linked to each other, have been carried out on a continuous basis or affect a set of very similar products or services, in such a way that their independent valuation is not appropriate, the comparability analysis referred to in the previous paragraph shall be carried out taking into account all of said transactions. 4. Two or more transactions are comparable when there are no significant differences between them in the circumstances referred to in paragraph 2 above that affect the price of the good or service or the margin of the transaction, or when there are differences that can be eliminated by making the necessary comparability adjustments. 5. The comparability analysis provided for in this article forms part of the documentation referred to in Article 16 of these Regulations and fulfills the obligation provided for in number 3.º of letter b) of paragraph 1 of the aforementioned article. 6. The degree of comparability, the nature of the operation and the information on comparable operations constitute the main factors that will determine, in each case, in accordance with the provisions of paragraph 4 of Article 18 of the Tax Law, the most appropriate valuation method. 7. When, despite the lack of sufficient data, it has been possible to determine a range of values that reasonably complies with the arm's length principle, taking into account the process of selection of comparables and the limitations of the information available, statistical measures may be used to minimize the risk of error caused by defects in comparability.) 4. Explanation regarding the selection of the valuation method chosen, including a description of the reasons that justified the choice of the same, as well as its application, the comparables obtained and the specification of the value or range of values derived from the same. 5. If applicable, criteria for the distribution of expenses for services rendered jointly in favor of several persons or related entities, as well as the corresponding agreements, if any, and cost sharing agreements referred to in Article 18 of this Regulation. 6. Copy of the previous valuation agreements in force and any other decision with any tax authority that are related to the aforementioned related-party transactions. 7.º Any other relevant information available to the taxpayer to determine the valuation of its related party transactions.
	c) Economic-financial information of the taxpayer: 1. Taxpayers' Annual financial statements. 2. Reconciliation between the data used to apply the transfer pricing methods and the annual financial statements, where applicable and relevant. 3. Financial data of comparables used and their source.
2.	If, in order to determine the market value, generally accepted valuation methods and techniques other than those indicated in letters a) to e) of Article 18.4 of the Tax Law are used, such as discounted estimated future cash flow methods, the specific method or technique chosen shall be described in detail, as well as the reasons for its choice. Specifically, the magnitudes, percentages, ratios, interest rates, discount rates and other variables on which the aforementioned methods and techniques are based shall be described, and the reasonableness and consistency of the assumptions assumed shall be justified by reference to historical data, business plans or any other element considered essential for the correct determination of the value and its adequacy to the arm's length principle. The use of observable market data should be maximized, which should be accredited, and the use of subjective considerations and non-observable or verifiable data should be limited as far as possible. The documentation to be kept at the disposal of the tax authorities will include the reports, documents and computer media necessary for the verification of the correct application of the valuation method and the resulting market value.
3.	The documentation obligations set forth in paragraph 1 above shall refer to the tax period in which the taxpayer has carried out the related-party transaction. When the documentation prepared for a tax period continues to be valid in subsequent tax periods, it shall not be necessary to prepare new documentation, without prejudice to the need to make any necessary adaptations.
4.	In the case of related persons or entities whose net turnover, defined in the terms established in Article 101 of the Tax Law, is less than 45 million euros, the specific documentation shall have the following simplified content: a) Description of the nature, characteristics and amount of the related transactions. b) Name and surnames or company name or full name, tax domicile and tax identification number of the taxpayer and of the related persons or entities with which the transaction is carried out. c) Identification of the valuation method used. d) Comparables obtained and value or ranges of values derived from the valuation method used. In the case of persons or entities that meet the requirements established in Article 101 of the Tax Law, this specific documentation may be completed through the standardized document prepared for this purpose by Order of the Minister of Finance and Public Administrations. These entities will not have to provide the comparables referred to in letter d) above.
5.	The simplified content of the specific documentation referred to in the previous section will not be applicable to the following transactions: a) Those carried out by taxpayers of the Personal Income Tax, in the development of an economic activity, to which the objective estimation method is applicable with entities in which they or their spouses, ascendants or descendants, individually or jointly among all of them, hold a percentage equal to or higher than 25% of the capital stock or of the equity. b) Transactions for the transfer of businesses. c) Transactions for the transfer of securities or shares representing the participation in the equity of any type of entities not admitted to trading on any of the regulated securities markets, or which are admitted to trading on regulated markets located in countries or territories classified as tax havens. d) Transactions for the transfer of real estate. e) Transactions on intangible assets. However, in the case of entities referred to in Article 101 of the Tax Law or individuals and not involving transactions carried out with persons or entities resident in countries or territories considered as tax havens, the specific documentation obligations shall not include the comparability analysis referred to in Article 17 of this Regulation.
6.	For the purposes of the provisions of article 18.13 of the Tax Law, the information referred to in numbers 1, 2 and 3 of letter a), numbers 3, 4 and 7 of letter b), numbers 1, 2 and 3 of letter c) of section 1, as well as the information referred to in section 2 of this article, constitute different sets of data. For the same purposes, each of the information referred to in numbers 1, 2, 5 and 6 of letter b) of paragraph 1 of this Article and letters a), b), c) and d) of paragraph 4 of this Article shall be considered as data.
Art. 18	Requirements for cost sharing agreements entered into between related persons or entities. For the purposes of the provisions of paragraph 7 of Article 18 of the Tax Law, the cost sharing agreements for goods and services entered into by the taxpayer shall include the identification of the other participating persons or entities, in the terms provided for in letter a) of paragraph 1 of Article 16 of these Regulations, the scope of the specific activities and projects covered by the agreements, their duration, criteria for quantifying the distribution of the expected benefits among the participants, the form of calculation of their respective contributions, specification of the tasks and responsibilities of the participants, consequences of the adhesion or withdrawal of the participants as well as any other provision that foresees adapting the terms of the agreement to reflect a modification of the economic circumstances.

Recommendations for Local File:

Regarding content requirements:

Detailed Related Party Identification:

Spain requires the full name or company name, tax domicile, and tax identification number of the taxpayer and of each related party with which the controlled transaction is carried out.

We recommend preparing a comprehensive related party identification document — covering all required identifiers — and saving it in the Resources section for attachment to the Local File, or including this information in the Description subsection of the corresponding Reporting Level.
Alternative Valuation Methods:

Spain requires that where generally accepted valuation methods other than the five standard transfer pricing methods are used — such as discounted cash flow — the specific method or technique must be described in detail, including all magnitudes, ratios, interest rates, discount rates, and other variables, with justification of assumptions by reference to historical data or business plans.

We recommend documenting the alternative valuation methodology and its supporting assumptions in the Application Assumption and Price Setting Description columns within the Methods tab of the corresponding Reporting Level, and saving all underlying reports, documents, and supporting models in the Resources section.
Cost Distribution Criteria for Jointly Rendered Services:

Spain requires, where applicable, documentation of the criteria used for distributing expenses for services rendered jointly to several related entities, together with corresponding agreements.

We recommend documenting the cost allocation methodology and distribution keys in the Service Arrangements tab of the Service Arrangements section, and uploading the corresponding agreements in the Legal Agreements section.
Cost-Sharing Agreements:

Spain requires that cost-sharing agreements document the identification of participating parties, the scope and duration of the agreement, the criteria for quantifying the distribution of expected benefits, the form of calculating contributions, the responsibilities of each participant, and the consequences of adhesion or withdrawal.

We recommend documenting all cost-sharing arrangements — covering all required elements under Article 18 of the RIS — in the Service Arrangements section, and uploading the corresponding agreements in the Legal Agreements section.
Reconciliation of TP Data to Financial Statements:

Spain requires a reconciliation between the data used to apply the transfer pricing methods and the annual financial statements, where applicable and relevant.

We recommend preparing a supporting reconciliation schedule demonstrating how the TP methodology inputs tie to specific financial statement line items, and saving it in the Resources section for attachment to the Local File.
APAs and Tax Authority Rulings:

Spain requires copies of any advance pricing agreements in force and any other decisions with any tax authority that are related to the controlled transactions.

We recommend documenting all relevant APAs and tax authority rulings in the Rulings section.

Regarding format/structural requirements:

Spain does not prescribe a strict standardised template for the Local File. The content requirements are defined under Article 16 of the RIS and are closely aligned with the OECD BEPS Action 13 Local File structure. Note that a simplified Local File applies where the entity's net turnover is below EUR 45 million, and a further simplified standardised document may be used where the entity meets the criteria of Article 101 of the Tax Law (net turnover below EUR 10 million). Certain transactions — including transfers of businesses, real estate, intangibles, and unlisted securities — are excluded from the simplified regime regardless of turnover.

We recommend preparing the Local File using TPDoc's standard Local File functionality, ensuring it is completed before the end of the voluntary period for filing the corporate income tax return. In the event of a tax inspection, the documentation must be provided to the AEAT within 10 days of request. The Local File may be prepared in English or Spanish.

Master File

Art. 15	Specific Group documentation
1.	The documentation relating to the group, referred to in letter a) of paragraph 2 of Article 13 of these Regulations, shall include: a) Information relating to the structure and organization of the group: 1. Identification of the different entities that form part of the group.
	b) Information on the group's activities: 1. Main activities of the group, as well as a description of the main geographical markets in which the group operates, the main sources of profits and the supply chain of those goods and services that represent at least 10% of the group's net turnover for the tax period. 2. General description of the functions performed, risks assumed and main assets used by the different entities of the group, including changes with respect to the previous tax period. 3. Description of the group's transfer pricing policy, including the pricing method or methods adopted by the group. 4. List and brief description of the relevant cost-sharing agreements and service contracts between group entities. 5 .Description of the reorganization operations and acquisition or disposal of relevant assets, carried out during the tax period.
	c) Information relating to the intangible assets of the group: 1. General description of the overall strategy of the group in relation to the development, ownership and exploitation of intangible assets, including the location of the main facilities in which research and development activities are carried out, as well as the management thereof. 2. A list of the group's intangible assets relevant for transfer pricing purposes, indicating the entities that own them, as well as a general description of the group's transfer pricing policy in relation to them. 3. Amount of the consideration corresponding to the group's related party transactions derived from the use of the intangible assets, identifying the group entities affected and their territories of tax residence. 4. List of agreements between group entities relating to intangibles, including cost sharing agreements, main research services agreements and licensing agreements. 5. General description of any relevant transfers of intangibles.
	d) Information relating to the financial activity: 1. General description of the group's financing arrangements, including the main financing agreements entered into with persons or entities outside the group. 2. Identification of the group entities that perform the group's main financing functions, as well as the country of incorporation and the country where their effective place of management is located. 3. General description of the transfer pricing policy relating to the financing arrangements between group entities.
	e) Financial and tax situation of the group: 1. Consolidated annual financial statements of the group, provided that they are mandatory for the group or are prepared on a voluntary basis. 2. List and brief description of the previous valuation agreements in force and any other decision with any tax authority that affects the distribution of the group's profits between countries.
2.	The documentation provided for in this article shall not be applicable to those groups in which the net turnover, defined in the terms established in article 101 of the Tax Law, is less than 45 million euros.
3.	For the purposes of the provisions of article 18.13 of the Tax Law, the information referred to in number 1 of letter a), numbers 1, 2, 3 and 5 of letter b), number 1 of letter c) and numbers 1 and 3 of letter d) of section 1 of this article constitute different sets of data. For the same purposes, each of the information referred to in number 2 of letter a), number 4 of letter b), numbers 2, 3, 4 and 5 of letter c), number 2 of letter d) and numbers 1 and 2 of letter e) of section 1 of this article shall be considered as data.

Recommendations for Master File:

Regarding content requirements:

Supply Chain for Top Products/Services:

Spain requires a description of the supply chain for products and services representing at least 10% of the group's net turnover for the tax period, including the main geographical markets and main sources of profits.

We recommend documenting the supply chain for all qualifying products and services in the Supply Chains section, using the Supply Chain Description and Description of Geographic Markets columns for each entry.
Year-on-Year Changes in FAR:

Spain requires a general description of changes in the functions performed, risks assumed, and main assets used by group entities with respect to the previous tax period.

We recommend documenting any year-on-year changes in the group's functional profile in the Functional Profiles tab of Standard Policies, explicitly noting changes compared to the prior tax period.
Group Transfer Pricing Policy:

Spain requires a description of the group's transfer pricing policy, including the pricing method or methods adopted by the group.

We recommend documenting the group's overall TP policy — including the applied methods — in the Group Overview for Master File text field within the Group Description tab of the Group section.
Cost-Sharing Agreements and Service Contracts:

Spain requires a list and brief description of relevant cost-sharing agreements and service contracts between group entities.

We recommend documenting all significant intra-group service arrangements and cost-sharing agreements in the Service Arrangements tab of the Service Arrangements section, and uploading the corresponding agreements in the Legal Agreements section.
Amount of Consideration for Intangible Transactions:

Spain requires disclosure of the amount of consideration corresponding to related-party transactions derived from the use of intangibles, identifying the group entities and their territories of tax residence.

We recommend documenting the consideration amounts and counterparty jurisdictions for intangible-related transactions in the Intangible Transfers tab of the Intangible Assets section.

Regarding format/structural requirements:

Spain does not prescribe a strict standardised template for the Master File. The content requirements are defined under Article 15 of the Corporate Income Tax Regulations (RIS) and are closely aligned with the OECD BEPS Action 13 Master File structure. Note that the Master File obligation applies only where the group's net turnover exceeds EUR 45 million.

We recommend preparing the Master File using TPDoc's standard Master File functionality, ensuring it is completed contemporaneously and maintained for potential inspection by the Agencia Estatal de Administración Tributaria (AEAT). Where the group's net turnover is below EUR 45 million, no Master File is required. The Master File may be prepared in English or Spanish.