Chapter 8. Transactions with related persons or entities
The LIS establishes that the accounting valuation is the general criterion that must be taken into account to determine the amount of Corporate Tax.
However, for certain legal transactions and operations, including related party transactions , this criterion is replaced by market value . For this reason, and in accordance with the provisions of article 18 of the LIS, the value that must be considered to compute these operations is that would have been agreed upon by independent persons or entities under conditions that respect the principle of competition.
The establishment of this special assessment criterion implies that companies, on the one hand, inform the tax authorities of the operations carried out during the year ( information obligations ); and on the other hand, have the necessary justification to prove that the assessment has been carried out correctly ( documentation obligations ).
For the tax periods beginning on or after 1 January 2015 , Law 27/2014, of 27 November, on Corporate Tax and, in particular, the Corporate Tax Regulations approved by Royal Decree 634/2015, of 10 July, in its Chapter V "Information and documentation on related entities and persons" of Title I, introduced a series of new features that have entailed a substantial modification of the information and documentation obligations for said operations.
Subsequently, and with effect for the tax periods beginning on or after January 1, 2016 , Royal Decree 1074/2017, of December 29, modified the regulation of information and documentation on related entities and transactions regulated in the Corporate Income Tax Regulations, to incorporate the obligation to submit the so-called country-by-country information . This amendment is based on the conclusions adopted in the so-called "BEPS" Action Plan, i.e. "Base Erosion and Profit Shifting» (the Action Plan against base erosion and profit shifting), which have been developed within the Organization for Economic Cooperation and Development (OECD) and which culminated in 2015 in the called "Action 13" which, among other aspects, includes a series of regulations aimed at providing this information.
Next, we will analyze the content of the information and documentation obligations, taking into account that the information obligation is a distinct and independent obligation from the documentation obligation .