Spain vs Cupire Padesa S.A., May 2026, Supreme Court, Case No ATS 4668/2026
Table of Contents
Case Information
Court: Tribunal Supremo, Sala de lo Contencioso-Administrativo, Sección Primera
Case number: Recurso de Casación n.º 3298/2025 (ATS 4668/2026)
Citation: Roj: ATS 4668/2026 – ECLI:ES:TS:2026:4668A
Applicant: CUPIRE PADESA, S.A.
Respondent: Administración General del Estado
Jurisdiction: Spain
Judgment date: 13 May 2026
Judgment Summary
This is an admissions ruling (Auto) of the First Section of the Supreme Court's Administrative Chamber, dated 13 May 2026, in cassation proceedings n.º 3298/2025.
The court admitted the cassation appeal brought by CUPIRE PADESA, S.A. against the judgment of 25 February 2025 of the Fourth Section of the Superior Court of Justice of Galicia, which had dismissed the company's administrative-law appeal.
The underlying dispute concerned a provisional corporate income tax assessment for the year 2016, issued by the Regional Inspection Office of Galicia on 14 October 2021, arising from a partial tax inspection of the fiscal consolidation group n.º 31/08, of which CUPIRE PADESA, S.A. is the dominant entity.
The Supreme Court identified four questions of objective cassational interest for the development of case law, all relating to the requirements for selecting and applying transfer pricing methods, in particular the profit split method (MDR, método de la distribución del resultado), under the current Ley del Impuesto sobre Sociedades.
Background
CUPIRE PADESA, S.A. is the dominant entity of fiscal consolidation group n.º 31/08. The group covers the entire value chain of natural stone, specifically slate, from extraction through to commercialisation.
In the year under examination (2016), three subsidiary entities performed the distinct stages of the chain. ULTRANSA, S.L. carried out extraction of slate from quarries and mines, cutting blocks using diamond wire. PIZARRAS LA CAMPA, S.L. transformed the raw material into finished slate tiles on the same day it was received, given the requirement to work the material while wet. CUPA PIZARRAS, S.A. handled commercialisation and sale to end customers, maintaining stock and developing markets.
The State Tax Inspectorate commenced a partial audit on 24 February 2020, limited to the mining tax benefits applied by the dependent entity ULTRANSA, S.L. A notice of disagreement (acta modelo A02, reference 73303082) was drawn up on 3 June 2021.
The Regional Inspection Office issued a provisional liquidation agreement pursuant to Article 101.4 of Ley 58/2003 (LGT) and Article 190.1 of the General Regulation approved by Real Decreto 1065/2007, of 27 July. CUPIRE PADESA, S.A. challenged that assessment by way of economic-administrative claim n.º 15/06479/2021 before the Tribunal Económico-Administrativo Regional de Galicia (TEARG). The TEARG dismissed the claim on 22 March 2024.
CUPIRE PADESA, S.A. then brought a contentious-administrative appeal (procedimiento ordinario n.º 15363/2024) before the Fourth Section of the Superior Court of Justice of Galicia, which dismissed it by judgment of 25 February 2025.
Core Dispute
The tax inspection adjusted the transfer prices applicable to intra-group transactions within the slate production chain for the 2016 corporate income tax year. The central disagreement between the company and the tax authority concerned which transfer pricing method should be used to value those intra-group transactions and how that method should be applied.
CUPIRE PADESA, S.A. argued that the transactional net margin method (MMNO, método del margen neto operacional) was the appropriate method. It submitted an economic analysis based on a search of the SABI database, identifying 13 comparable companies operating in the natural stone sector in Spain, using the ROA (return on assets) indicator.
The tax authority applied instead the profit split method (MDR, método de la distribución del resultado), distributing the combined result between the extraction and transformation entities in proportion to their operating costs, and excluding the commercialisation entity from the calculation.
The Superior Court of Justice of Galicia upheld the tax authority's approach. It found that the comparable companies submitted by the taxpayer were insufficiently comparable, noting among other things that the human factor which the company itself had identified as paramount in the transformation phase was not reflected in the ROA ratio chosen, that the comparables had a materially lower turnover than PIZARRAS LA CAMPA, S.L. (which exceeded €8,000,000 in 2016 against the sample threshold of more than €1,000,000), and that several comparables worked with marble rather than slate. The court also held that the MDR did not need to incorporate the commercialisation phase, given the substantive independence of the extraction and transformation activities, which had previously been concentrated in a single entity before a corporate restructuring.
In cassation, CUPIRE PADESA, S.A. alleged infringement of Article 18 of Ley 27/2014, of 27 November, del Impuesto sobre Sociedades (LIS); Article 17 of Real Decreto 634/2015, of 10 July, approving the Reglamento del Impuesto sobre Sociedades (RIS); and Article 102.2 of Ley 58/2003, of 17 December, General Tributaria (LGT).
Court Findings
The First Section verified that the formal requirements for a cassation appeal were met: the appeal was filed in time, against a susceptible judgment, by a party with standing, and the infringed provisions were properly identified.
The court noted that the Supreme Court had previously admitted a cassation appeal (recurso n.º 5217/2022, auto of 25 January 2023) on the related question of whether the LIS permits free choice of transfer pricing method following the reform introduced by Ley 28/2014. However, that case was resolved by judgment of 14 December 2023 without deciding the substantive question, because the administration had erroneously applied the prior text (Real Decreto Legislativo 4/2004) to the tax year 2015, preventing the court from forming case law on a provision that had not actually been applied.
The court therefore found that there is no existing Supreme Court case law on: the existence or otherwise of a hierarchy among the transfer pricing methods set out in the LIS; the specific motivational requirements for a transfer pricing adjustment; whether the administration's chosen method must be tested against what independent parties would have done; whether the MDR may distribute results using operating costs as the sole criterion without regard to risks, functions and responsibilities; or whether the MDR may exclude one entity in the value chain from the calculation.
The court found that the appeal presents objective cassational interest for the development of case law pursuant to Article 88.3.a) of Ley 29/1998, of 13 July, reguladora de la Jurisdicción Contencioso-administrativa (LJCA), because the lower court applied provisions on which no Supreme Court jurisprudence exists. It also found that the circumstance in Article 88.2.c) LJCA is present. The Administración General del Estado, represented by the State Legal Service (abogacía del Estado), opposed admission.
Outcome
The First Section admitted the cassation appeal n.º 3298/2025, identified four questions of objective cassational interest, designated Articles 18 LIS, 17 RIS and 102.2 LGT as the provisions to be interpreted, and remitted the proceedings to the Second Section of the Administrative Chamber for substantiation and decision. The admissions ruling is final and not subject to further appeal.
TP Method Highlighted
The tax authority applied the profit split method (MDR, método de la distribución del resultado) under Article 18.4.d) of Ley 27/2014 (LIS), distributing the combined result between the extraction entity (ULTRANSA, S.L.) and the transformation entity (PIZARRAS LA CAMPA, S.L.) in proportion to the operating costs incurred by each. The commercialisation entity (CUPA PIZARRAS, S.A.) was excluded from the calculation.
CUPIRE PADESA, S.A. contended that the transactional net margin method (MMNO, método del margen neto operacional) under Article 18.4.e) LIS was the correct method, using the ROA indicator and a sample of 13 companies drawn from the SABI database.
The Superior Court of Justice of Galicia upheld the MDR as appropriate, finding that it did not require comparables, that it could account for the human factor through weighting of personnel costs, and that the exclusion of the commercialisation phase was justified by the substantive independence of the production activities. The court also rejected the taxpayer's MMNO analysis on comparability grounds.
Major Issues / Areas of Contention
- Whether a transfer pricing liquidation must identify in detail all statutory parameters examined and refer precisely to the interpretative criteria of specialist bodies when selecting and implementing the chosen valuation method (motivational requirements).
- Whether, once the administration has chosen and applied a transfer pricing method, it must inevitably compare the result with the conditions that independent parties would have agreed in similar circumstances for the result to be considered reliable.
- Whether, when applying the profit split method (MDR), any distribution criterion may be chosen, and specifically whether operating costs may be used as the sole distribution parameter without regard to the risks, functions and responsibilities assumed by each party.
- Whether, when applying the profit split method (MDR), the distribution of results may be carried out by excluding from the calculation the data of one entity that forms part of the value chain contributing to the combined result.
- Whether the LIS (Ley 27/2014) establishes any hierarchy among the transfer pricing valuation methods listed in Article 18.4, or whether it is sufficient to justify the selection of any one method without justifying the exclusion of the others.
- The correct comparability analysis required under Article 17 of the RIS (Real Decreto 634/2015) when assessing whether proposed comparable companies are sufficiently similar to the tested party.