BASQUE COUNTRY AND NAVARRE: Intragroup operations

These operations are considered related-party transactions. This implies that they must be valued at market prices using one of the existing valuation methods.

What happens if the Tax Office detects that they have not been valued at market prices?

Well, it will regularize the situation by making adjustments.

What are they?

There are two types of adjustments:

• Primary. First, it will modify the declarations of those involved in the transaction –both upwards and downwards– and will make them pay taxes as if the transaction had been valued at market prices.
• Secondary. Additionally, it will make a second adjustment so that the existing price difference (compared to the market value) is taxed according to its economic nature.

How do these adjustments affect companies?

The tax costs of companies may increase. However, by meeting certain requirements and taking action before the Tax Office issues the settlement resulting from the procedure, it is possible to take measures to reduce those costs.

If your company carries out operations with other group companies, contact us; we will help you to value them correctly, and we will advise you if the Tax Office reviews any transaction.