Court slams documentation as taxpayer loses appeal
April 14, 2008
Spanish National Court sets standard for intra-group services evidence
A ruling last week by the Spanish National Court has set the standard for the scope of documentary evidence supporting intra-group services. The taxpayer – a Spanish subsidiary of a French multinational – lost an appeal for a tax deduction for group management services after assessment by the Spanish tax authority. The court rejected the appeal stating the documentary evidence provided by the subsidiary was scant and wholly inadequate. The impact of the ruling is that provides a benchmark for the scope of the transfer pricing documents necessary to support a claim that intra-company services meet the arm’s length standard.
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