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V2321-14 8 September 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · operaciones vinculadas

Transactions between a company and a newly established entity with 33.33% ownership must be valued at market value

The consultant asks whether sales between their company and a newly established entity in which they hold a stake must comply with related party transaction rules. The DGT responds that, due to ownership exceeding 5%, the entities are considered related and must apply market value.

The question raised

1. Whether the sales transactions between the newly created company and the constituent companies would be subject to the market valuation referred to in Article 16 of the Recast Text of the Corporate Income Tax Law and other obligations regarding related-party transactions.

The DGT's ruling

As the taxpayer holds a 33.33% stake in a newly incorporated entity, both are considered related parties pursuant to Article 16.3.a) of the Recast Text of the Corporate Income Tax Law. Therefore, transactions between them must be valued at their arm's length market value and the documentation required by regulation must be maintained, subject to the exceptions provided in the regulations.

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