Country: Spain

Spain vs Nutreco España S.A., February 2025, Supreme Court, Case No. STS 904/2025 – ECLI:ES:TS:2025:904

Nutreco España, S.A. had taken on significant debt to finance an acquisition of shares by other foreign group companies. Its role in the acquisition was limited to the channelling of funds. The debt consisted of an intercompany loan of 240 million euros granted by Nutreco Nederland B.V. and an amount of 100 million euros from […]

Spain vs IHLT ESPAÑA S.L. (NEX TYRES S.L.), December 2024, Audiencia Nacional, Case No SAN 6910/2024 – ECLI:ES:AN:2024:6910

IHLE ESPAÑA (later NEX TYRES) purchased tyres from its German parent company (IHLE BB) using what it claimed was the CUP method. It claimed that IHLE BB sold the tyres at the same price as it paid to third party suppliers, simply passing on additional transport costs and a small administration fee. The tax authorities […]

European Commission vs Spain, September 2023, General Court of the European Union, Case No T-826/14

In 2016 the European Commission found that a Spanish tax regime constituted illegal state aid. The tax regime allowed for the deduction of goodwill in the case of acquisitions of shares in foreign companies. Spain and several companies appealed the decision. Judgment of the General Court The Court annulled the decision of the Commission.   […]

Spain vs Compañía Española de Petróleos, S.A., July 2023, Tribunal Supremo, Case No STS 3507/2023 – ECLI:ES:TS:2023:3507

At issue was whether or not a proportionate share of management and general administrative expenses incurred by the head office in Spain should be allocated to its PE in Algeria. The tax authorities (appelante) argued that, in general, these expenses cannot be individualised and, therefore, a proportional criteria should be used to determine the amount […]

Spain vs Tomas Bodero, S.A., July 2023, Tribunal Superior de Justicia, Case No STSJ CL 3218/2023

Tomas Bodero S.A. added a 4% fee when re-invoicing goods purchased from unrelated manufacturers to its Panamanian subsidiary. The transfer pricing documentation stated that “this fee (4%) is very similar to the fee that brokers in the sector usually charge for brokering imports of goods, so it can be concluded that a market price is […]

Spain vs GLOBAL NORAY, S.L., June 2023, Supreme Court, Case No STS 2652/2023

In 2009 and 2010 Global Nory, S.L. distributed a dividend of 7,000,000 euros to its parent company resident in Luxembourg, without declaring withholding taxes, as it considered that the dividend was exempt. In 2013, Global Nory, S.L. was notified of the commencement of general inspection proceedings, referring, among other items, to the dividend payments, and […]

Spain vs Institute of International Research España S.L., June 2023, Audiencia Nacional, Case No SAN 3426/2023 – ECLI:EN:AN:2023:3426

Institute of International Research España S.L. belongs to the international group Informa Group Brand, of which Informa PLC, a company listed on the London Stock Exchange, is the parent company. In 2006 it had entered into a licence agreement (“for the use of the Licensed Property, Copyright, Additional Property Derived Alwork, the Mark and Name […]

Spain vs Ferroli España, S.L.U., May 2023, Audiencia Nacional, Case No 3400/2023 – ECLI:EN:AN:2023:3400

Ferroli España, S.L.U. is a Spanish manufacturer manufacture of cookers and heaters. In FY 2010 and 2011 the company had various transactions with other companies in the Ferroli Group and reported negative profit margins on these transactions. According to the company this was due to the financial crises in Spain. Following an audit, the tax […]

Spain vs Electrolux España, S.A., March 2023, Audiencia Nacional, Case No SAN 2414/2023 – ECLI:EN:AN:2023:2414

Following an audit, the Spanish tax authorities issued a notice of assessment where the profit of Electrolux España had been adjusted resulting in additional taxable income. The related party transactions resulting in the adjustment were Manufacturing costs under a manufacturing contract Profit margin under a distribution contract Deductibility for restructuring costs Pricing of a warehouse […]

Spain vs Bunge Iberica SA, March 2023, Audiencia Nacional, Case No SAN 2118/2023 – 113/2020 -ECLI:ES:AN:2023:2118

Bunge Iberica SA participates in the Group’s cash pooling system, both as a borrower and as a provider of funds. The tax authorities had issued a notice of assessment in which the interest rates on deposits and withdrawals were adjusted and determined on the basis of a group credit rating. Bunge Iberica SA filed a […]

Spain vs “SGGE W T Spanish branch”, January 2023, TEAC, Case No Rec. 00/07503/2020/00/00

SGGE W T is a Spanish branch of SGG that carries out distribution and marketing activities related to the information technology network products and services. SGG is part of the KF group which “is an international group that provides solutions and services in the Information Technology (IT) sector, starting its activity in . .. as […]

Spain vs Logistic Branch, December 2022, General Directorate of Taxes, Binding Consultation No V2612-22

In a request for a binding consultation the question raised was whether activities carried out in Spain resulted in the existence of a permanent establishment. The General Directorate considered that an enterprise cannot fragment a cohesive operating business into several small operations and argue that each of these is merely engaged in a “preparatory or […]

Spain vs Universal Pictures International Spain SL, December 2022, Audiencia Nacional, Case No SAN 5855/2022 – ECLI:EN:AN:2022:5855

Universal Pictures International Spain SL is a distributor of films on the Spanish Market. It distributes films both from related parties (Universal Pictures) and from unrelated parties. Following an audit, the Spanish tax authorities issued an assessment where the remuneration received for distribution of films from related parties had been compared to the remuneration received […]

Spain vs Transalliance Iberica SA, November 2022, Audiencia Nacional, Case No SAN 5336/2022 – ECLI:EN:AN:2022:5336

Transalliance Iberica SA had priced its controlled transactions for the years 2008-2013 by comparing the gross margin achieved on an overall basis with the gross margins of comparable companies. Following an audit, the tax authorities issued a notice of assessment rejecting the method used by the company due to differences in the treatment of cost […]

Spain vs “XZ Insurance SA”, October 2022, Tribunal Economic-Administrative Central (TEAC), Case No Rec. 00/03631/2020/00/00

“XZ Insurance SA” is the parent company in a group engaged in insurance activities in its various branches, both life and non-life, finance, investment property and services. An audit was conducted for FY 2013-2016 and in 2020 an assessment was issued in relation to both controlled transactions and other transactions. Among outher issued the tax […]

Spain vs LA REHOS, S.L., July 2022, Supreme Court, Case No 7268/2021, ATS 10616/2022 – ECLI:EN:TS:2022:10616A

The issue presented before the Spanish Supreme Court is if and how the arm’s length principle apply to the salary of the owner of a consultancy company for personal services provided to an independent company, i.e. if the price agreed for provision of these services to an independent party is a CUP in relation to […]

Spain vs Delsey España S.A, February 2022, Tribunal Superior de Justicia, Case No 483/2022 (Roj: STSJ CAT 1467/2022 – ECLI:ES:TSJCAT:2022:1467)

DELSEY España belongs to the French DELSEY-group and sells suitcases and other travel accessories on the Spanish market. The Spanish distributor had declared losses for FY 2005-2010 and was subject to a transfer pricing audit for FY 2011 to 2014. Based on the audit, the tax authorities concluded that the losses in FY 2005-2010 was […]

Spain vs Dasher Spain S.A., January 2022, Supreme Court, Case No ATS 601/2022 – ECLI:EN:TS:2022:601A

An appeal before the Supreme Court was allowed to determine whether or not the Spanish State Tax Administration Agency is obliged to notify the Provincial Treasury of the Basque Historical Territories of a transfer pricing valuation adjustments issued to an entity taxed in accordance with the regulations of the Basque Historical Territories. Click here for […]

Spain vs Narcea Producciones y Promociones S.L., January 2022, Tribunal Superior, Case No STSJ M 122/2022 – ECLI:ES:TSJM:2022:122

Narcea Producciones y Promociones, S.L. (Narcea S.L.) had as shareholders Mr. Emiliano and Mrs. Filomena and their son, Mr. Ismael, a professional footballer, who had an employment relationship with the football club Hércules CF SAD of Alicante. Narcea S.L. purportedly managed the economic rights, the representation fees and the image and TV rights of Mr. […]

Spain vs Sierra Spain Shopping Centers Services S.L.U., January 2022, National Court, Case No SAN 151/2022 – ECLI:ES:AN:2022:151

Sierra Spain Shopping Centers Services S.L.U. is part of a multinational group that manages shopping centres. Sierra Spain had deducted expenses for services rendered from a related party in Portugal. According to Sierra Spain, the services were related to strategic management and marketing. The tax authorities considered the expenses non-deductible and issued an assessment of […]

Spain vs MAHOU (SAN MIGUEL) S.A., December 2021, Audiencia Nacional, Case No SAN 5537/2021 – ECLI:ES:AN:2021:5537

The Mahou (SAN MIGUEL) S.A Group is active in brewing and sale of beers. Penibética de cervezas y bebidas SL and Andaluza de cervezas y bebidas SL are wholly owned by Cervezas Alhambra SL, which again is owned by MAHOU (SAN MIGUEL) S.A. The main activity of Cervezas Alhambra SL is the distribution and marketing […]

Spain vs “Benchmark SA”, November 2021, TEAC, Case No Rec. 4881/2019

The tax authorities excluded some of the entities selected by the taxpayer in a benchmark study, as it considered that they did not meet the necessary comparability requirements, and also included some of the excluded entities, as it considered that they were comparable. These modifications to the benchmark resulted in a variation of the arm’s […]

Spain vs Varian Medical Systems Iberica S.L., October 2021, Audiencia Nacional, Case No SAN 4241/2021 – ECLI:ES:AN:2021:4241

Varian Medical Systems Iberica S.L. is the Spanish subsidiary of the multinational company Varian Medical Systems and carries out two types of activities – distribution and after-sales services. The products sold was purchased from related entities: Varian Medical Systems Inc., Varian Medical Systems UK Ltd., Varian Medical Systems International AG and Varian Medical Systems HAAN […]

Spain vs Comeresa Prensa S.L.U., September 2021, Audiencia Nacional, Case No SAN 3857/2021 – ECLI:ES:AN:2021:3857

VOCENTO, S.A. is the parent company of a multinational publishing group. The registered office of VOCENTO, S.A. is in Bizkaia and it is subject to the regulations of this Territory regarding Corporate Income Tax. COMERESA PRENSA, S.L.U. is a wholly-owned subsidiary of VOCENTO and holds most of the shares in regional press publishing companies held […]

Spain vs SGL Carbon Holding, September 2021, Tribunal Supremo, Case No 1151/2021 ECLI:EN:TS:2021:3572

A Spanish subsidiary – SGL Carbon Holding SL – had significant financial expenses derived from an intra-group loan granted by the parent company for the acquisition of shares in companies of the same group. The taxpayer argued that the intra-group acquisition and debt helped to redistribute the funds of the Group and that Spanish subsidiary […]

Spain vs DIGITEX INFORMÁTICA S.L., February 2021, Audiencia Nacional, Case No 2021:629

DIGITEX INFORMATICA S.L. had entered into a substantial service contract with an unrelated party in Latin America, Telefonica, according to which the DIGITEX group would provide certain services for Telefonica. The contract originally entered by DIGITEX INFORMATICA S.L. was later transferred to DIGITEX’s Latin American subsidiaries. But after the transfer, cost and amortizations related to […]

Spain vs BIOMERIEUX ESPAÑA SA, February 2021, Audiencia Nacional, Case No 2021:416

BIOMERIEUX ESPAÑA SA is active in the business of clinical and biological analysis, production, distribution, training and technical assistance. Likewise, the provision of computer services and, in particular, the computer management of laboratories. Following an audit the tax authorities found that the controlled prices agreed for the acquisition of instruments and consumables between bioMérieux España […]

Spain vs VAT PE of Ashland Industries Europe GMBH, November 2020, Supreme Court, Case no 1.500/2020

A Swiss company, Ashland Industries Europe GmbH, had not declared a presence in Spain for VAT purposes and did not charge VAT for local sales. However, the Swiss company used the resources of its Spanish subsidiary when performing these local sales of goods in Spain. On that basis, the Spanish tax authorities found that the […]

Spain vs JACOBS DOUWE EGBERTS ES, SLU., November 2020, Tribunal Superior de Justicia, Case No STS 3730/2020 – ECLI:EN:TS:2020:3730

At issue in this case was whether or not it is possible to regularize transactions between companies by directly applying art. 9.1 of DTA between Spain and French, without resorting to the transfer pricing methods provided for in local Spanish TP legislation. Application of article 9 and taxing according to local tax legislation is often […]

Spain vs COLGATE PALMOLIVE ESPAÑA, S.A., September 2020, Supreme Court, Case No 1996/2019 ECLI:ES:TS:2020:3062

The tax authorities had issued an assessment according to which royalty payments from Colgate Palmolive España S.A (CP España) to Switzerland were not considered exempt from withholding taxes under the Spanish-Swiss DTA since the company in Switzerland was not the Beneficial Owner of the royalty-income. The assessment was set aside by the National Court in […]

Spain vs Stavelot Comunicación S.L., May 2020, Tribunal Supremo, Case No 446/2020, STS 951/2020 – ECLI:EN:TS:2020:951

In the case at hand a related-party transactions had been carried out between a person (shareholder) and a related company. The transaction took place in 2007 and 2008 and was exempt from Spanish transfer pricing documentation requirements. The tax authorities issued an assessment where the transfer pricing had been adjusted and a penalty/fine was added […]

Microsoft – Taxes and Transfer Pricing

Microsoft’s tax affairs have been in the spotlight of tax authorities all over the World during the last decade. Why? The setup used by Microsoft involves shifting profits from sales in the US, Europe and Asia to regional operating centers placed in low tax jurisdictions (Bermuda, Luxembourg, Ireland, Singapore and Puerto Rico). The following text has been […]

Spain vs ARW Enterprise Computin Solution SA, September 2019, Tribunal Superior de Justicia, Case No STSJ M 7038/2019 – ECLI: ES:TSJM:2019:7038

A Spanish subsidiary, ARW Enterprise Computin Solution SA, had deducted intra-group management fees paid according to two service contracts with two french group companies – Distrilogie SA and DCC France Holding SAS. For an expense to be deductible it is required not only that invoice, account, payments have been imputed correctly, but also that the […]

Spain vs SGL Carbon Holding, April 2019, Audiencia Nacional, Case No ES:AN:2019:1885

A Spanish subsidiary – SGL Carbon Holding SL – had significant financial expenses derived from an intra-group loan granted by the parent company for the acquisition of shares in companies of the same group. The taxpayer argued that the intra-group acquisition and debt helped to redistribute the funds of the Group and that Spanish subsidiary […]

Spain vs Acer Computer Ibérica S.A., March 2019, AUDIENCIA NACIONAL, Case No 125:2017, NFJ073359

Acer Computer Ibérica S.A. (ACI) is part of the multinational ACER group, which manufactures and distributes personal computers and other electronic devices. Acer Europe AG (AEAG), a group entity in Switzerland, centralises the procurement of the subsidiaries established in Europe, the Middle East and Africa, and acts as the regional management centre for that geographical […]

Spain vs COLGATE PALMOLIVE ESPAÑA, S.A., November 2018, Audiencia National, Case No 643/2015 – ECLI:EN:AN:2018:5203

The tax authorities had issued an assessment according to which royalty payments from Colgate Palmolive España S.A. (CP España) to Switzerland were not considered exempt from withholding taxes under the Spanish-Swiss DTA since the company in Switzerland was not the Beneficial Owner of the royalty-income. Judgment of the National Court The court held in favour […]

Spain vs Representaciones Creta S.L., October 2018, Tribunal Supremo, Case No 1504/2018, STS 3632/2018 – ECLI:ES:TS:2018:3632

Tax penalties/fines had been issued following a transfer pricing adjustments in regards of controlled transactions exempt from Spanish TP documentation requirements. An appeal was filed by the taxpayer claiming to be excluded from the Spanish penalty regime. The appeal was dismissed by the lower courts. Judgment of the Supreme Court The Supreme Court upheld the […]

Spain vs ICL ESPAÑA, S.A. (Akzo Nobel), March 2018, Audiencia Nacional, Case No 1307/2018 ECLI:ES:AN:2018:1307

ICL ESPAÑA, S.A., ICL Packaging Coatings, S.A., were members of the Tax Consolidation Group and obtained extraordinary profits in the financial years 2000, 2001 and 2002. (AKZO NOBEL is the successor of ICL ESPAÑA, as well as of the subsidiary ICL PACKAGING.) On 26 June 2002, ICL ESPAÑA, S.A. acquired from ICL Omicron BV (which […]

Spain vs Microsoft Ibérica S.R.L, February 2018, Audiencia Nacional, Case no 337/2014

Microsoft Ibérica S.R.L is responsible for distribution and marketing of Microsoft products in Spain. According to an agreement concluded between Microsoft Ibérica and MIOL (Microsoft’s Irish sales and marketing hub) with effect from 1 July 2003, Microsoft Ibérica would received the largest amount of either a commission based on sales invoiced in Spain or a […]

Spain vs COLGATE PALMOLIVE HOLDING SCPA, February 2018, Audiencia Nacional, Case No 568/2014

According to Colgate Palmolive, following a restructuring, the local group company in Spain was changed from being a “fully fledged distributor” responsible for all areas of the distribution process to being a “limited risk distributor” (it only performs certain functions). A newly established Swiss company, Colgate Palmolive Europe, instead became the principal entrepreneur in Europe. […]

Spain vs Schwepps (Citresa), February 2017, Spanish Supreme Court, case nr. 293/2017

The Spanish Tax administration made an income adjustment of Citresa (a Spanish subsidiary of the Schweeps Group) Corporate Income Tax for FY 2003, 2004, 2005 and 2006, resulting in a tax liability of €38.6 millon. Citresa entered into a franchise agreement and a contract manufacturing agreement with Schweppes International Limited (a related party resident in the Netherlands). […]

Spain vs. ZERAIM IBÉRICA, SA, Oct. 2016, Spanish Supreme Court, Case no 4675-2016

In this case ZERAIM IBÉRICA SA argues that the OECD Transfer Pricing Guidelines has not been applied propperly, as secret comparables have been used in determining the arm’s length price of controlled transactions between the Spanish company and its Dutch parent company. The court concludes that the “..Guidelines are considered to be merely recommendations to […]

Spain vs PEUGEOT CITROEN AUTOMOVILES, May 2016, Supreme Court, case nr. 58/2015

The company had deducted impairment losses recognised on an investment in an Argentinean company (recently acquired from a related entity) arising from the conversion into capital of loans granted to the entity by other group companies, loans which had been acquired by the Spanish taxpayer. The tax administration argued that acquisition of such loans would not have taken […]

Spain vs. branch of ING Direct Bank, July 2015, Audiencia Nacional, Case No 89/2015 2015:2995

In the INC bank case the tax administration had characterised part of the interest-bearing debt of a local branch of a Dutch bank, ING DIRECT B.V,  as “free” capital, in “accordance” with EU minimum capitalisation requirements and consequently reduced the deductible interest expenses in the taxabel income of the local branch for FY 2002 and […]

Spain vs “X Beverages S.A.”, October 2013, TEAC, Case No 00/02296/2012/00/00

“X Beverages S.A.” had entered into an agreement with the ABCDE Group for the use of concentrate and trademarks for the production and sale of beverages in Spain, but according to the agreement, “X Beverages S.A.” only paid for the concentrate. Following an audit for the financial years 2005-2007, the tax authorities issued an assessment […]

Spain vs Roche, January 2012, Supreme Court, Case No. 1626/2008

Prior to a business restructuring in 1999, the Spanish subsidiary, Roche Vitaminas S.A., was a full-fledged distributor, involved in manufacturing, importing, and selling the pharmaceutical products in the Spanish and Portuguese markets. In 1999 the Spanish subsidiary and the Swiss parent, Roche Vitamins Europe Ltd., entered into a manufacturing agreement and a distribution agreement. Under […]

Spain vs EcoloJeans SL, May 2011, Audiencia Nacional, Case No SAN 2304/2011 – ECLI:ES:AN:2011:2304

EcoloJeans SL had made purchases from its majority shareholder, Mr Donato. According to the tax authorities, the agreed prices for these purchases were higher than the arm’s length price, resulting in lower taxation. The tax authorities had determined the arm’s length price by applying the resale price method, based on the margin obtained by companies […]

Spain vs Refrescos Envasados S.A., November 2009, Supreme Court, Case nr. 3582/2003

Refrescos Envasados, S.A. – a Coca-Cola subsidiary in Spain – bought soft drink concentrate manufactured by Coca-Cola companies in Ireland and France. According to the tax authorities the prices paid for the concentrate were above market prices. Hence, an assessment was issued where the prices for the concentrate had been lowered resulting in additional taxable […]