SPAIN Trends and Developments Contributed by: Carolina del Campo, Joan Hortalà, Jaime Collado and Pablo Álvarez, Cuatrecasas
• ring fence LVAS, and apply 5% only where criteria are met, documenting exclusions for high-value services; and • incorporate global mobility controls into transfer pricing governance, including PE risk checklists and MAP readiness. Intangibles and the Digital Economy: DEMPE Discipline, Synergies and Human Capital Digital operating models compress product cycles, depend on data and algorithms, and scale through platforms. In this environment, traditional one sided methods can be strained when both parties make unique and valuable contributions. Spanish audits increasingly probe DEMPE narratives, especially where legal ownership sits in one entity while devel - opment and enhancement occur in another. DEMPE remains the allocation compass Returns from intangibles follow the functions of DEMPE, informed by who controls risks and has the financial capacity to bear them. Legal ownership alone does not entitle an entity to residual returns; economic ownership derives from actual performance and con - trol of DEMPE activities. DEMPE maps should be kept current and granular, reflecting dispersed and hybrid teams. Synergies, location savings and workforce in place as comparability factors While not intangibles per se, these factors can neces - sitate comparability adjustments or support bilateral methods such as profit split, particularly where both parties make unique and valuable contributions and reliable one-sided comparables are unavailable. It is important to be explicit about the source and magni - tude of synergies (eg, shared platforms, common data assets), quantify location savings where material and explain how workforce in place contributes to returns. Delineating transfers and use rights It is important to: • clearly identify the specific intangibles involved (patents, software, data sets, trade marks, know- how), the expected benefits and the scope of rights transferred or licensed (field of use, territory, exclusivity, sublicensing);
• choose methods that reflect the nature of the con - tributions and the availability of data; • implement relief from royalties with careful rate selection for brand and technology licences; • profit-split where both sides make unique contribu - tions or one-sided methods where comparables are reliable; • recognise that digital businesses often require forward-looking valuation inputs; and • document scenarios and sensitivities. Intersections with services and financing Intangibles do not sit in isolation. High-value services may create or enhance intangibles, and financing terms can allocate risk in ways that affect who is enti - tled to residual returns. It is necessary to ensure that intercompany agreements and pricing are co-ordi - nated: a service provider that exercises control over development risk may warrant a share of residual prof - it, while a financier that merely provides funds without controlling risk generally earns a routine return. Practical actions for 2026 These include the following: • update DEMPE maps to reflect current operating models, including remote and hybrid teams; • test whether unique and valuable contributions by multiple parties suggest a bilateral method; • where using one-sided methods, make explicit and quantify comparability adjustments (eg, for location savings); • align legal agreements and cost sharing with actual control of risks and the capacity to bear them; and • prepare clear, auditable narratives linking DEMPE activities to outcomes in the financials. Spanish Administrative Practice: Interquartile Range and the Median Interquartile range as the standard narrowing tool In Spain, when comparability defects cannot be iden - tified or quantified – common when drawing compa - rables from commercial databases – the interquartile range is widely used to enhance reliability by removing outliers. Courts and administrative practice acknowl - edge this narrowing as consistent with OECD guid - ance and EU Joint Transfer Pricing Forum recommen - dations. It is necessary to clearly explain a narrowing
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