- Landmark Supreme Court Ruling: On July 15, 2025, the Spanish Supreme Court issued a pivotal judgment (STS 3721/2025) regarding the transfer pricing treatment of cash pool arrangements, specifically addressing the case of Bunge Ibérica, S.A. and its participation in a zero-balance cash pool managed by Bunge BV, a Netherlands-based entity.
- Key Findings on Cash Pool Treatment: The Court ruled against the asymmetrical treatment of cash pool balances, determining that both positive and negative balances should be classified as short-term intra-group loans with symmetrical interest rates. It emphasized that the consolidated credit rating of the group should guide the arm’s length interest rate, and Bunge BV’s role was limited to administrative functions, warranting only a service fee.
- Establishment of Binding Jurisprudence: This ruling establishes binding jurisprudential doctrine in Spain, clarifying that cash pool balances must be treated symmetrically, aligning Spanish transfer pricing rules with the latest OECD guidelines, and reinforcing the need for a consolidated group credit rating in determining financial arrangements within cash pools.
Source Jose Angel Julia
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