Spain Supreme Court Clarifies Transfer Pricing Rules for MNE Group Cash Pooling Arrangements

The Spanish Supreme Court July 15 issued Decision No. 985/2025, clarifying the transfer pricing treatment of cash pooling arrangements operated by multinational enterprise (MNE) groups. The taxpayer, the Spanish subsidiary of Bunge Global, participated in a zero-balance cash pooling arrangement managed by a Dutch entity in its MNE group. The tax authorities found that asymmetry between the borrowing and crediting rates didn’t meet the arm’s length principle. On appeal, the Supreme Court found that: 1) interest rates for both contributed and borrowed amounts in a cash pool must be symmetrical; 2) the reduction in the tax bases of the borrowing ...