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Achieve transfer pricing compliance and optimize your tax position

Transfer pricing services: documentation, benchmarking, and audit defense. OECD compliance guaranteed.

The problem

Multinational groups face growing transfer pricing demands: OECD guidelines, Spanish documentation requirements on related-party transactions, risk of adjustments by the tax authority, international double taxation, and penalties for non-compliance. Inadequate documentation turns every tax audit into a threat to the group's profitability.

Our solution

We provide comprehensive transfer pricing services: benchmarking studies, mandatory documentation preparation (master file and local file), advance pricing agreement (APA) negotiation, dispute resolution, and design of intercompany pricing policies compliant with OECD guidelines across multiple jurisdictions.

Process

How we do it

1

Related-party transaction analysis

We identify and characterize all intercompany transactions: sales of goods, intra-group services, intangible transfers, financing, and cost-sharing arrangements.

2

Comparability study (benchmarking)

We perform comparability analyses using specialized databases to determine the arm's length price ranges applicable to each transaction type.

3

Documentation and pricing policy

We prepare the master file, local file, and, where applicable, the Country-by-Country Report (CbCR). We design coherent and defensible transfer pricing policies.

4

Audit defense

We represent the group before the tax authority in transfer pricing examinations, including mutual agreement procedures and arbitration to eliminate double taxation.

500+
Transactions documented
100%
Audits passed
15+
Jurisdictions covered

The transfer pricing documentation prepared by BM Consulting withstood a full tax authority audit without a single adjustment. Their knowledge of OECD guidelines and the Spanish framework is exceptional.

Fernando Gil CFO, Nextera Industrial Group

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Obligations in Spain

Spanish transfer pricing rules are set out in Article 18 of the Corporate Tax Act and its implementing regulations. Documentation requirements follow the OECD three-tier standard: master file (group documentation), local file (entity documentation), and Country-by-Country Report (CbCR) for large groups.

Non-compliance is not just a theoretical risk. The Spanish tax authority has intensified transfer pricing examinations in recent years, with specialized teams that analyze intercompany policies using sophisticated tools. Having documentation prepared and up to date is the best defense.

Valuation methodologies

Choosing the right valuation method is one of the most critical decisions in transfer pricing. No single method is universally superior: suitability depends on the transaction type, the availability of reliable comparables, and the functions, assets, and risks of each entity.

For goods transactions, the comparable uncontrolled price (CUP) method is preferred when internal or external comparables exist. For intra-group services, cost plus is usually the most practical. For complex transactions involving unique intangibles, profit split may be the only viable option. Our team selects and justifies the optimal method for each transaction.

How to avoid tax adjustments

The key to avoiding transfer pricing adjustments is prevention: robust documentation, coherent policies, and periodic review. We recommend that our clients update their documentation annually, review pricing policies when business circumstances change, and consider applying for an APA for high-volume or complex transactions.

When an audit is already underway, documentation quality makes all the difference. A well-founded report with rigorous comparability analysis and solid economic rationale is the most effective tool for defending the group’s position and avoiding adjustments that can lead to double taxation and prolonged litigation.

FAQ

Frequently asked questions

What is transfer pricing?
Transfer pricing refers to the prices set for transactions between related entities (companies within the same group). Regulations require these prices to be established as if the transactions were between independent parties (the arm's length principle). The goal is to prevent profits from being artificially shifted to low-tax jurisdictions.
When is transfer pricing documentation mandatory?
In Spain, the documentation obligation applies to entities with turnover exceeding 10 million euros or belonging to groups that exceed that threshold. It also applies to specific transactions such as those with entities in tax havens, regardless of volume. Groups with turnover exceeding 750 million euros must also file the Country-by-Country Report.
What valuation methods exist?
The main methods recognized by the OECD are the comparable uncontrolled price (CUP), the cost plus method, the resale price method, the transactional net margin method (TNMM), and the profit split method. The choice of method depends on the transaction type and the availability of reliable comparables.
What happens if I fail to comply with transfer pricing rules?
Non-compliance can result in tax adjustments that increase the corporate tax base, penalties for missing documentation (between 1,000 and 10,000 euros per omitted data point), and risk of double taxation if the other country's authority does not accept the adjustment. Penalties can be very significant for high-volume transactions.
What is an APA (Advance Pricing Agreement)?
It is an agreement with the tax authority that fixes in advance the valuation method applicable to related-party transactions for a set period (typically 4 years, renewable). APAs provide legal certainty and eliminate the risk of subsequent adjustments, although they require a negotiation process and full transparency.
Do transfer pricing rules apply to SMEs with related-party transactions?
Yes, although with simplified obligations. SMEs with related-party transactions must comply with the arm's length principle even if they are not required to prepare full documentation. This is particularly relevant for transactions between a company and its shareholders or directors, such as compensation, rentals, or loans.

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