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BEPS shakes up transfer pricing reporting requirements
The Draft Bill approving the Corporate Income Tax Regulations has just been published. Taxand Spain outlines the main transfer pricing news.
The Draft Bill on the Corporate Income Tax Regulations (still under public discussion) proposes important new legislation, both in quantitative and qualitative terms, regarding controlled transactions.
The most important issue is the introduction of country-by-country reporting obligations and the strengthening of the transfer pricing documentation requirements.
In line with the latest developments of the OECD within Action 13 of the BEPS Project, country-by-country reporting obligations are introduced for Spanish-resident entities considered ultimate parent companies of a group.
The information requested will be required from 2016 onwards, according to a template to be approved by the tax authorities for that purpose. This template will accurately follow the contents published by the OECD and will include, on an aggregate basis for each country or jurisdiction, and in terms of their respective local currencies, the following items:
- revenues, differentiating between those obtained with related parties and those with third parties;
- profit before income tax;
- income tax paid (including withholdings);
- income tax accrued (including withholdings);
- stated capital;
- accumulated earnings;
- number of employees;
- tangible assets other than cash and cash equivalents;
- list of resident entities, including permanent establishments and the primary activities that each of those entities performs; and
- any other information considered to be significant plus and explanation, if applicable, of the data that has been provided.
Quality tax advice, globally
Although the Draft Bill is still under public scrutiny, it is highly likely that most of its contents will become definitive. Thus, multinational groups with a presence in Spain should pay attention to them, and take the necessary steps as soon as possible to ensure they remain compliant.