Tax
Transfer pricing regulations are not valid to discuss the deductibility of expenses incurred vis-à-vis third parties
In a groundbreaking ruling, the Supreme Court concludes that the tax authorities cannot use transfer pricing regulations to deny the deduction of expenses that a Spanish company has incurred with third parties, even if the underlying business decision has been taken by the group.Portugal grants additional time for the submission of Model 62 filing (Pilar Two) in regards FY2025
Order No. 114/2026-XXV, of 1 September has been published, extending the deadline for filing the Model 62 return in respect of fiscal year 2025, allowing it to be filed, without any surcharges or penalties, until the last day of the 12th month following the end of the relevant fiscal year.Poland: Current status and key proposals of Tax Deregulation 2.0
The Polish government has presented a package of proposals entitled “Deregulation 2.0” concerning tax administration and tax law. Their stated aim is to simplify tax settlement and increase legal certainty by improving relations between the tax administration, taxpayers and entrepreneurs. Three areas have so far been included as separate projects in the Council of Ministers’ work schedule, but the draft legislation has not yet been published. These measures have only been announced so far, and their scope and timetable may change.Spain - The taxpayer's protected digital domicile: a missing legal framework
The growing digitalisation of taxpayers' personal and professional activity raises new challenges for the protection of privacy and calls for the recognition and regulation of a genuine “protected digital domicile”, distinct from the physical domicile and from the fiscal domicile.Spain: Regularisation under the tax neutrality regime in Corporate Income Tax only allows the elimination of the abusive tax advantage, including under the TRLIS regime
In a novel judgment, the Supreme Court rejects that, under the former consolidated text of the Corporate Income Tax Act (TRLIS) preceding the current tax law, the deferral inherent in the neutrality regime could be rejected on the basis that the relevant transaction had been carried out exclusively to obtain a tax advantage.The Supreme Court will rule on the administrative silence regime applicable to requests for declarations of special municipal interest or utility, which are necessary for the application of IBI tax rebates
The conclusion of the court could have implications for other municipal taxes, in relation to which the regulations establish similar rebates.Spain: Transfer pricing rules cannot be used to deny the deduction of labor costs related to a restructuring
According to the court, these rules specifically address the pricing of related-party transactions and therefore cannot be relied on to conclude that expenses arising from a restructuring decision made by the group are not deductible if those expenses stem from relationships with third parties, such as employees who are laid off and receive severance pay.