Is your company part of a group of companies? Are you a subsidiary or branch of a multinational? Are you a member of a professional company to which you provide your services? If so, surely you perform or receive services or deliveries of goods with the companies of the Group, with your parent company or with your company and, therefore, the tax regulations of the Corporation Tax force to carry out these operations at market price in order to avoid transfers of benefits from one company or country to another.

In addition, once quantitative limits have been exceeded, generally € 250,000 with each linked entity, it also forces you to document and justify them through the so-called Transfer Pricing Documentation, which is made up of the Group Documentation or master file and the documentation of the taxpayer or local file.

The obligation to document these transactions is independent of the size of the company, since, if it depends on a Group, it will be necessary to be at the invoicing of the latter. In this case, depending on the invoicing, the documentation obligations may be much simpler, but they will also exist in their reduced version, except that the Group invoices less than 10 million Euros, in which case the documentation to be presented is collected in model 232.

For groups between 10 and 45 million in turnover, the simplified documentation omits the master file and the taxpayer documentation (local file) will have a simplified content that includes the description and amount of the linked transactions, the identification of the valuation method used and the comparable obtained and the value or ranges of values ​​derived from it, which implies that an economic analysis must also be carried out.

Addwill can help you prepare this documentation and leave the business decisions to you.

Need to document related transactions

In the globalized world in which we find ourselves increasingly, operations between different countries will expand, with Spain also being a recipient of foreign investment. On the other hand, any company in our environment, small or medium, already makes investments, sells or provides its services and signs contracts abroad.

In this context, the Tax Agency has placed emphasis on the review of operations between companies of a group or of these and their professional partners, having a high level of information, both its own and through collaboration with the different tax authorities of the other countries.

Documenting the operations between the entities of the group allows the taxpayer to be defended much more effectively in relation to how he values ​​the operations carried out with his related entities against possible regularizations in a tax inspection, in addition to avoiding the corresponding sanctions, which are not of small amount, that are imposed if such documentation is not available, when it is required to do so.

Additional advantages of documenting related operations

The fact of preparing this documentation helps to efficiently manage the operations between the group according to your business model, especially locating and correctly remunerating the value that your company generates within the group through the analysis of the operational performance and the functions that each one of they carry out. Putting the result of this analysis into structured documentation is a highly effective and interesting tool to obtain conclusions that serve to make improvements in terms of efficiency and optimization of the business model.

Addwill has the equipment and the necessary experience to carry out this task with a practical approach in the matter in order to be able to fulfill this essential obligation and obtain, additionally, the necessary information that helps to make your business more efficient.

For any questions or for more information about it do not hesitate to contact us.