05 April 2009

The regulation will obligate companies to document and justify operations involving the exchange of goods and services between companies belonging to the same business group. These transactions will have to be carried out at market value and transactions within business groups will also be subject to the corresponding tax payments. This obligation will also affect companies between which other types of relationships exist, for example, when one holds a 5% capital share of the other. This documentation may be demanded in its entirety from any company which carries out transactions with a permanent entity or establishment outside of Spain or which cannot be considered a small-sized company. The new legislation aims to track transactions in the real estate sector more closely and also monitor the way the properties are subsequently used. Some of the most important measures are : 1. Obligation to state tax identification numbers and the means of payment used in all notarized documents that deal with real estate transactions and contracts. 2. Obligation to state the cadastral reference of the property in electricity supply contracts and leases and cessions of the use of the property.

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