Taxation of business groups
We structure and optimise your group: holding company and subsidiaries with their intragroup flows, related-party transactions and transfer pricing in order, the decision whether or not to consolidate, consolidated reporting and inorganic growth.
Book an initial assessment meetingWho it is for
A group multiplies complexity: transactions between companies, internal loans and dividends, and decisions that can no longer be taken company by company. Related-party transactions are one of the main sources of tax risk, and they almost never fail because of bad faith: they fail because they are not documented.
The structure already exists, but the flows between companies have been handled case by case.
Invoicing and lending between family companies: the part the Spanish Tax Agency looks at first.
You acquire or integrate companies, and each transaction leaves a new layer that has to fit in.
Group structure: holding company and subsidiaries
We take it that the holding company is already in place: what we review is what flows within it. Which services are invoiced between companies, how intra-group loans are documented and which route dividends take up to the parent company. Every arrow is a related-party transaction.
- Subsidiary 01Business activityOperating company
- Subsidiary 02Shared resourcesServices company
- Subsidiary 03AssetsProperty holding company
- Golden flowDividends up to the holding company. The three subsidiaries can distribute profits to the parent to concentrate capital and decide where it goes next.
- Burgundy flowLoans and provision of services. Resources coordinated by the group reach the subsidiaries that need them, with documented terms and functions.
- Subsidiary 01 · Operating companyInvoices the market and bears the business risk.
- Subsidiary 02 · Services companyCentralises resources and provides services to the group.
- Subsidiary 03 · Property holding companyHolds real estate and investments outside the operating risk.
Related-party transactions and transfer pricing
Those carried out between companies in the same group or with the shareholders: leases, management services, loans, licensing of the brand. In a group they are unavoidable; what matters is that they are identified, valued and documented before anyone asks about them.
The price must be the one that would be agreed with an independent third party, not a round figure to make the results fit. Deliverable: transfer pricing documentation and its market justification.
An example. The parent company invoices its subsidiary for a management service. At what price? If it charges nothing, that is below what any third party would charge for the work. If it charges a token euro, the price has been set to balance the result, not to pay for the service. The only defensible price is the market price: what an unrelated company would charge for the same thing. The gap between the price applied and the market price is the adjustment the Spanish Tax Agency can assess, and it may come with a penalty.
Consolidation: tax and accounting
Three different things that are often confused: one is mandatory above a certain size, another is optional and only pays off in some cases, and the third is internal information for decision-making.
| Judgement | Commercial law | Tax | Management |
|---|---|---|---|
| Is it mandatory? | Yes, once certain size thresholds are exceeded. | No. It is an optional regime. | No. It is a management decision. |
| Who is it accountable to? | Filed with the Companies Register, with consolidated annual accounts. | Before the Spanish Tax Agency, in corporate income tax. | To no one: it is internal information for management and the board. |
| What does it require? | Exceeding the group size thresholds. | A shareholding of at least 75% and a formal election for the regime. | Nothing. No requirements and no deadlines. |
| What is it for? | Presenting the group as a single unit. | Offsetting losses in some companies against profits in others and neutralising internal transactions. | Having the picture of the whole group to make decisions, without formally consolidating. |
We analyse whether consolidating pays off in your case, which of the three and in what order. Being a group does not require all three.
From a collection of companies to an organised group.
Documented, defensible related-party transactions.
Being a group doesn’t oblige you to consolidate: we tell you whether it pays off.
A consolidated view for management and the board.
Consolidated reporting and group dashboard
Consolidated cash
Actual to September · forecast October to DecemberGroup revenue
€1.61M
compared with €1.42M the previous yearProfitability
Consolidated group- Gross margin
- 47%
- EBITDA margin
- 22%
- Cash conversion
- 81%
A close with intragroup transactions eliminated, so the group can be seen as a single company.
Which company contributes margin and which consumes it, with no averages to hide it.
The same picture for everyone in the meeting: nobody turns up with their own spreadsheet.
Inorganic growth
Every acquisition or merger adds a layer to the group: one more company, another set of accounts to integrate and a tax risk that was not yours. The work lies in making that layer fit, not just in signing.
How we work
Group assessment
A map of companies, shareholdings and internal flows as they work today.
Risk and documentation
Related-party transactions identified, valued at arm’s length and documented.
Decision to consolidate
Calculation of whether tax consolidation pays off, and what accounting consolidation requires.
Consolidated reporting
A periodic close with the full picture of the group, in front of management and the board.
What you get
An orderly group
A clear and efficient holding-subsidiary structure.
Risk under control
Documented, defensible related-party transactions.
Consolidation with sound judgement
We tell you whether consolidating (for tax or company law purposes) is worth it for you.
Consolidated view
Management reporting for the whole group in one dashboard.
Growth with sound judgement
Well-planned acquisitions, mergers and integrations.
Let’s review your group’s structure and operations
How many companies you have, what is invoiced between them and what information reaches the board today. With that, we can already tell you what to put in order first.
Book an initial assessment meeting