Spain: Arm’s length remuneration in cash pooling arrangements of multinational groups (Supreme Court decision)
Reversal of October 2023 decision of National Court
The Supreme Court in July 2025 reversed an October 2023 decision of the National Court and held (985/2025) that, in the context of determining arm’s length remuneration in cash pooling arrangements of multinational groups, deposits and withdrawals are subject to symmetrical interest rates and that the credit rating applicable to loan operations was that of the group as a whole and not the borrowing entity.
KPMG observation
The decision will have major ramifications for multinational groups with cash pooling arrangements in place and further increase the importance of the functional analysis when it comes to determining arm’s length remuneration in intra-group financing transactions.
Read a September 2025 report prepared by the KPMG member firm in Spain