Spanish taxpayers that ended the fiscal year 2014 on December 31st must submit the Corporate Income Tax return on July 25, 2015, the latest. Once this time-limit has expired, taxpayers that had carried out in 2014, controlled transactions higher than €250,000 (per entailed company) are obliged to have at the disposal of the tax Authorities the corresponding transfer pricing report for that tax year.

This report must comprise specific information regarding the taxpayer and the group to which it belongs (articles 19 and 20 from the CIT Regulation). Briefly, these obligations are focused on the information related to the structure of the group, the performed intercompany transactions, the transfer pricing policies applied by the group in these transactions, and benchmarking analysis that justify the prices applied in those transaction were set under a fair market value policy. In this sense, in those cases were transfer prices are not aligned with the arm´s length standards, tax auditors may challenge the deduction of expenses or determine an income increase that would result in a higher tax base.

Non-compliance of transfer pricing obligations is deemed to be a serious infringement punished with economical sanctions: €1,500 per data and €15,000 per data set, for the year 2014. However, if tax Authorities makes assessment corrections, the economical sanction would amount 15% of these assessment with a minimum of the double penalty determined from the above-mentioned economical sanctions that correspond to the non-compliance of obligations.