SATs must invoice their members at a price equal to or higher than the cost

Agricultural Transformation Societies (SAT) operating under the tax regime for cooperatives face a relevant regulatory clarification regarding the valuation of their operations with members. The Directorate General of Taxes (DGT) has clarified the treatment of services and supplies that these entities provide in compliance with their bylaws.

What the DGT has ruled

The inquiry focuses on the application of Law 20/1990 on the Tax Regime for Cooperatives. The criteria establish that SATs providing services or supplies to their members may account for these operations at the effective price charged. However, this price must meet an indispensable requirement: it must be equal to or higher than the cost of the services or supplies provided.

This cost is not limited solely to direct expenses but must also include the entity's share of overheads. In the event that the effective price applied is lower than the cost of the operation, the regulations require that the latter be used for the calculation of the activity.

What this means for you

If you manage an Agricultural Transformation Society, this criterion directly impacts how you must value transactions with your members. It is not enough for a market price or an agreed price to exist; if that price turns out to be lower than the total cost (including overheads), the administration will require that the value based on cost be recorded and calculated.

This adjustment ensures that operations between the entity and its members do not divert the tax base in a way that undermines the special tax regime applicable to these organizations.

What should be done

It is necessary to verify that the prices applied to supplies and services to members meet the threshold of the real cost of the operation. It is recommended to conduct an analysis of production costs and overheads to ensure that the effective selling price does not fall below said value. Each operational situation must be assessed to guarantee compliance with Law 20/1990 and the Corporate Tax Law.