The European Commission has concluded that a Spanish tax scheme benefiting companies that acquire foreign shareholdings is incompatible with EU state aid rules. Spain must recover the aid granted, the Commission said October 15.
The scheme allows companies to deduct from their tax base “financial goodwill” derived from indirect shareholding acquisitions achieved through the acquisition of foreign holding companies.
The Commission, in October 2009 and in January 2011, found that a Spanish measure allowing tax deductions of financial goodwill for direct shareholding acquisitions violated state aid rules, concluding that the provision gave the beneficiaries a selective economic advantage over their competitors that carry out domestic acquisitions.
In March 2012 the Spanish authorities adopted a new administrative interpretation which allowed the deduction of financial goodwill deriving from indirect shareholding acquisitions. The Commission has now concluded that this amended application is also incompatible with EU state aid rules. The Commission ordered recovery of the aid, stating that “the beneficiaries of this new interpretation have no legitimate expectations as regards their situation.” See, release.
