Transfer Pricing Documentation in Spain: Master File and Local File

Transfer pricing documentation in Spain must show that related-party transactions were priced at arm’s length. For an SME in a group, keeping the Master File and Local File in order allows you to discuss the policy with the tax office on facts and reduces the risk of adjustments.

What the tax office usually requests

Inspectors ask for a group overview, functions and risks per entity, intercompany agreements, the chosen pricing method and benchmarks. They also check consistency with Corporate Income Tax and accounts. The deadline to submit documentation after a formal request is usually 10 business days, with a short extension of a few days if justified.

Master File and Local File: SME checklist

The Master File covers the global group: structure, intangibles, financing and pricing policy. The Local File details each Spanish related-party transaction with functional and economic analysis. Minimum checklist: chart, contracts, invoices, margin policy, benchmark search and accounting reconciliation. Update both files each year even if transactions repeat.

Thresholds and simplified requirements

As a rule, full documentation applies above a certain volume of related-party transactions, while smaller groups can use simplified content. If group turnover is modest, the burden is lighter, but an arm’s-length analysis remains required. Thresholds are tested year by year, so review them every 12 months.

Getting ready within 3 months

Spend month one mapping transactions, month two on benchmarks and month three drafting the reports. The our team reviews margin policies for groups with a foreign parent and, where the case follows an inspection request, aligns the reply.

If your company invoices parents or subsidiaries, sorting files before year-end helps. You can get in touch here for an initial consultation with no obligation to review your checklist.