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V1121-14 22 April 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · operaciones vinculadas

Management trusts between a company and its sole shareholder are deemed linked transactions

A company fully owned by an autonomous community seeks clarification on whether management trusts granted to its shareholder constitute linked transactions. The DGT confirms they do and that their value must align with the real costs set by autonomous community regulations.

The question raised

Whether the provision of services, by way of mandates, carried out by the consulting entity for its sole shareholder, are considered related-party transactions, and whether this would result in the obligation to value the transactions at arm's length market value.

The DGT's ruling

The company and its sole shareholder are related parties; therefore, transactions must be valued at their arm's length market value. In this scenario, the arm's length market value shall coincide with the amount determined by regional regulations, based on actual direct and indirect costs. Except for exceptions regarding amount, documentation obligations must be met to justify said valuation.

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