SPAIN Law and Practice Contributed by: Carolina del Campo, Joan Hortalà, Jaime Collado and Pablo Álvarez, Cuatrecasas
9.2 Arm’s Length Principle Spain does not use formulary apportionment. The arm’s length principle governs TP, and customs valu - ation remains a distinct legal regime even if taxpayers strive for factual consistency across both. 9.3 Impact of the Base Erosion and Profit Shifting (BEPS) Project BEPS Action 13 was implemented through RIS doc - umentation rules and CbC reporting requirements (Model 231), with AEAT publishing CbC analytics and methodology. Audit practices now rely more on risk assessment informed by CbC and inter-jurisdictional exchanges. 9.4 Impact of BEPS 2.0 Spain enacted the EU Minimum Tax Directive via Law 7/2024 and its implementing regulation (RD 252/2025). Groups within scope should assess inter - actions between Pillar Two outcomes (eg, effective tax rate and top-up tax by jurisdiction) and TP policies, governance, year-end adjustments and APAs. Pillar Two’s Impact on TP Planning and Evaluation Pillar Two’s 15% minimum tax reshapes TP guardrails in three ways. • First, cash tax timing: year-end TP adjustments that improve the arm’s length position may also move the effective tax rate needle if the jurisdiction is near the threshold; both corporate tax and top- up tax consequences should be modelled before closing the books. • Second, safe harbours and data dependencies: whether applying transitional or qualified safe har - bours, one should ensure that TP policies do not create volatility in Global anti-Base Erosion (GloBE) income or covered taxes that jeopardises safe harbour eligibility; stable, monitorable pricing beats theoretically perfect but noisy designs. • Third, APA interplay: one should confirm whether existing APAs remain economically neutral under Pillar Two (eg, no unintended ETR dips due to asymmetric recognition of adjustments), and be ready to brief the competent authorities during renewals on the Pillar Two lens.
Across all three, governance matters: one should implement joint tax TP steering to avoid siloed deci - sions. 9.5 Pillar One Amount B As of early 2026, Spain has not enacted domestic rules for Pillar One Amount B; monitoring continues at the OECD/EU levels. 9.6 Entities Bearing the Risk of Another Entity’s Operations Limited risk models are respected when contracts and conduct align. In financing, TEAC has underscored that, in cash pooling systems, group credit risk may be the appropriate benchmark where it best reflects the economic reality and the leader performs administra - tive/treasury, not bank-like, functions. 9.7 Allocation of Profits to Permanent Establishments (PEs) Where applicable treaties so provide, Spain follows an approach to PE attribution consistent with the Author - ised OECD Approach, recognising notional internal dealings at arm’s length. Domestic administration of the outcome follows the RIS and the treaty text. 10. Relevance of the United Nations Practical Manual on Transfer Pricing 10.1 Impact of UN Practical Manual on Transfer Pricing The UN Manual has no formal status in Spain; practice is keyed to the OECD Guidelines, though the UN text can be informative contextually. 11. Safe Harbours or Other Unique Rules 11.1 Transfer Pricing Safe Harbours Spain has no statutory safe harbour for low value- adding services or other TP categories. Pricing must be supported by analysis consistent with functions/ benefits and allowing comparability. Although the gen - eral rule of applying 5% over the costs for general management or administrative functions applies, it
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