RPC Superfos Pamplona purchased polymers via a central European purchasing system. Polymers are the group’s main raw material, accounting for around €20 million of manufacturing expenses each year — approximately 45 per cent of the total.
The tax authorities opened an audit because the purchase terms agreed with each supplier were unknown, the base price and premiums were not broken down by polymer type on the invoices, discounts to the purchasing centre were not shown on the manufacturers’ invoices, and many discounts appeared implicitly or without a clear calculation trail. A change in the methodology for remunerating the purchasing centre also caused remuneration to increase tenfold, making it crucial to verify these costs and their transfer pricing support.
In order to verify the deductibility of purchase expenses and the adequacy of the purchasing centre’s remuneration under transfer pricing rules, the tax authorities requested the service contract with the purchasing centre, the supporting report, supplier contracts for the current and previous years, and invoices and settlement details for all discounts paid to manufacturers and the purchasing centre. Despite multiple requests, many of these documents were missing or late, so the administration treated the non-compliance as a single breach under Article 203 of the General Tax Law (LGT) and imposed a penalty based on turnover.
Judgment
The Audiencia Nacional upheld the decision, finding the objective elements and culpability proven and rejecting RPC Superfos Pamplona’s objections.
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