a&o kreston
June 10, 2021
June 10, 2021
June 1, 2021
Transfer Pricing in the STA 2021 General Tax Control Plan
By Mario Quiliez, Mario Pires & Elena Ramirez
The 2021 publication of the Annual Tax and Customs Control Plan in early February has confirmed that the Spanish Tax Agency is looking more and more closely, in their investigations and checks for tax fraud, at issues associated with related-party transactions and transfer pricing in multi-national groups, large corporations, and medium-sized companies.
The special economic and financial conditions due to the coronavirus pandemic and the State’s response to its effects pose significant challenges for both companies and tax administrations, from a practical standpoint, in applying the arm’s length principle.
The Spanish Tax Agency, to tackle challenges from 2021 and in studies regarding transfer pricing for 2020 (the year of the outbreak and spread of Covid-19) and following years, will take into account the guidelines recently passed for the Inclusive Framework on BEPS on the application of the Organisation for Economic Co-operation and Development (“OECD”) transfer pricing guidelines, concerning several specific issues arising from or exacerbated by the Covid-19 pandemic, as well as their consistency with the general pricing policy of companies or business groups.
Specifically, the issues covered in the recent OECD guidelines, as a practical example of how the arm’s length principle should be applied to related-party transactions impacted by the Covid-19 crisis, are as follows: (i) comparability analysis; (ii) losses and the allocation of Covid-19 specific costs; (iii) government assistance programmes; and (iv) advance pricing agreements (“APAs”).
Furthermore, for 2021, STA has announced a specific campaign to verify proper compliance with obligations to report related-party transactions on form 232. It is important to note that the information reported on this form must be consistent with the transfer-pricing dossier. Likewise, failure to report operations and/or reporting inaccurate data on the 232 form is a serious tax violation, punishable with a fine of up to 2% of the value of the operations not reported or inaccurately reported.
Other priority focuses announced, regarding related-party transactions, are:
All the above confirms that Spanish companies with related-party transactions must properly document transfer pricing, which must be in line with the company’s transfer pricing policy, taking into account that studies from 2020, and for other years affected by the situation caused by the coronavirus, the OECD Guidance on the transfer pricing implications of the Covid-19 pandemic will apply.
As a final note, in recent years, the Spanish Tax Agency has been looking closely at issues related to transfer pricing and related-party transactions, as per guidance from the OECD.
May 21, 2021
Kreston Global Tax Group’s webinar on the impact of Brexit on international tax structuring, held on 12 May 2021, gathered over 45 tax specialists within our Network.
The webinar focused on the impact of Brexit on tax regulations and trade across the UK, US, European and Asian markets.
Special thanks to Mark Taylor, Leader of Kreston Global Tax Group, and to all our panellists Don Reiser, Ganesh Ramaswamy, Guillermo Narvaez, Jelle Bakker, Sharon Bedford for sharing their local perspective.
Kreston members can view the event page for more information and related resources.
May 18, 2021
TP-Link is a global provider of reliable networking and wi-fi devices and accessories, distributing to more than 170 countries and serving billions of people worldwide. Its products include ‘smart’ bulbs, plugs and cameras for people’s homes and cloud solutions, routers and high-speed wired and wireless networking for businesses.
TP-Link UK’s group auditor is Kreston Reeves, led by Peter Manser. During 2020, the company carried out a restructure. This meant that TP-Link NL needed a group audit to reflect the new corporate structure and Kreston Reeves referred the company to Van Herwijnen Kreston (VHK). After a short proposal process, TP-Link NL appointed VHK as its group auditor. They are also advising on income tax assessment, general tax matters and our Dutch firm Bentacera is assisting in transfer pricing support and documentation.
This successful outcome demonstrates the strength and reach of the Kreston International network. It also shows how the network can help smooth the changes many companies have to make following the UK’s departure from the EU.
Olivier Walravens, from Van Herwijnen Kreston, said “We were pleased to be able to help TP-Link change its group audit process so effectively and efficiently. Sharing and transferring the necessary data and documents was straightforward as Kreston firms are part of the same, secure system.”
Chris Sun, International Accountant at TP-Link NL, said: “We’re very grateful to Kreston for making this major change so ‘smart’. It was achieved in good time and they took care of everything for us. Using firms within the Kreston network has undoubtedly saved the company time and money.”
