Skip to main content
Practical Manual of Companies 2022.

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 which would have been agreed upon by independent persons or entities under conditions that respect the principle of free competition .

The establishment of this special assessment criterion implies that companies, on the one hand, inform the Tax Administration of the operations carried out in the year ( information obligations ); and on the other hand, they have the necessary justification that proves that the valuation has been carried out correctly ( documentation obligations ).

For the tax periods that began on or after January 1, 2015 , Law 27/2014, of November 27, on Corporate Tax, and above all, the Tax Regulations on Companies approved by Royal Decree 634/2015, of July 10, in its Chapter V "Information and documentation on entities and related persons" of Title I, introduced a series of new developments that have led to a substantial modification of the information obligations and documentation of said operations.

Subsequently, and with effects for the tax periods beginning on January 1, 2016 , Royal Decree 1074/2017, of December 29, modified the regulation of information and documentation on related entities and operations regulated in the Corporate Tax Regulations, to incorporate the obligation to present the so-called country-by-country information . This modification is based on the conclusions adopted in the so-called “BEPS” Action Plan, that is, “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 different and independent obligation from the documentation obligation .

  1. Obligations with respect to the provision of information
  2. Documentation obligations