The Supreme Court’s Judgment 985/2025, issued on July 15, marks a major shift in how cash pooling systems are assessed.
While its impact will appear in year-end documentation — including Form 232 for related-party transactions — the real significance of this ruling goes far beyond mere compliance. It changes the way intragroup treasury is managed and compensated.
What has changed
The Supreme Court case addressed two common issues in most cash pooling structures:
- Interest rate asymmetry
The group applied higher rates to fund withdrawals than to liquidity contributions. - Credit rating treatment
The Spanish subsidiary argued for its individual rating, while the Tax Authority insisted on using the group rating.
The Court established two immediate principles:
- Interest rate symmetry
Rates applied to contributions and withdrawals should generally be equivalent. The pooler cannot claim a financial margin like a bank, as its role is typically administrative and low risk.
- Group credit rating
Credit evaluations must reflect the group level, accounting for centralized financing and shared risk.
Impact on multinational groups
Beyond the technicalities, the ruling forces companies to rethink the pooler’s role: is it just a liquidity manager, or a true financial hub taking on risk?
Three key areas depend on the answer:
- Proper remuneration.
- When and how asymmetries can be justified.
- And the documentation that must support it.
The focus shifts from the rates themselves to the economic reality: what value and risks does the central entity truly assume?
What to review before year-end
With Form 232 deadlines approaching, companies should use the 2025 closing to review cash pooling arrangements in three areas:
- Interest rate policies
- Review spreads between creditor and debtor rates and assess whether functional reasons justify differences. In most cases, applying symmetric rates and compensating the pooler with an administrative fee is the safest approach.
- Functional analysis
Document the pooler’s responsibilities, the risks it assumes, and the assets it uses. Operational evidence — decisions, responsibilities, exposure to losses — will be key to justify any exceptions. - Documentation consistency
Form 232 will reflect this analysis, but it should be seen as the result of a well-designed policy, not its starting point.
When asymmetry is allowed
The Court does not ban all rate differences but requires a solid, documented justification.
It may be appropriate if the pooler:
- Actively manages the group’s liquidity.
- Take on credit or currency risks.
- Handles hedging or external financing lines.
Additional compensation in these cases should be backed by clear contracts, benchmarking, and contemporaneous evidence.
Conclusion: act before 2026
STS 985/2025 makes cash pooling a priority area for review for multinational groups.
Form 232 will merely document a deeper strategy: proving that intragroup financial conditions reflect economic reality and comply with the arm’s length principle.
The time to act is now:
- Review treasury policies.
- Strengthen functional analysis.
- Update documentation before the 2025 closing.
Our firm advises multinational groups on reviewing cash pooling structures, updating transfer pricing policies, and preparing documentation in line with the Supreme Court’s new doctrine.
For any questions, our addwill tax experts are at your disposal. You can submit your inquiry by clicking here, and we will be happy to assist you.