As part of the 2026 Tax Reform, Article 33 of the Income Tax Law has been amended, introducing significant changes to the thresholds that trigger the obligation to prepare a Local File. The revised thresholds, effective from tax year 2026, are outlined below:
Goods:
Up to tax year 2025: €1,000,000.
From tax year 2026: €5,000,000.
Services:
Up to tax year 2025: €1,000,000.
From tax year 2026: €2,500,000.
Royalties/Intangible Property:
Up to tax year 2025: €1,000,000.
From tax year 2026: €2,500,000.
Financing Transactions:
Up to tax year 2025: €5,000,000.
From tax year 2026: €10,000,000.
Other:
Up to tax year 2025: €1,000,000.
From tax year 2026: €2,500,000.
Where the above thresholds are not exceeded, taxpayers are required to comply with the Minimum Documentation requirements.
The Minimum Documentation requirements are set out in Income Tax Circular 6/2023, issued on 6 July 2023.
We, at KSA, remain at your disposal should you require any further information or assistance in relation to this matter.
