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European Commission

Press release

Brussels, 17 July 2013

State aid: Commission opens in-depth investigation into amended Spanish tax scheme for acquisition of shares in foreign companies

The European Commission has opened an in-depth investigation to verify whether the new interpretation of a Spanish scheme allowing tax deductions in connection with the acquisition of shareholdings in non-Spanish companies is in line with EU state aid rules. The Commission had found the original version of the scheme incompatible with the state aid rules because it gave the beneficiaries a selective economic advantage over their competitors performing domestic acquisitions. According to consistent administrative practice, the original scheme applied only to direct acquisitions, whereas the new Spanish interpretation would retroactively allow tax deductions also for indirect acquisitions. At this stage, the Commission considers that the amended scheme may again involve state aid and has doubts as regards the compatibility of such aid. The opening of an in-depth investigation gives interested third parties an opportunity to submit comments on the measure under assessment. It does not prejudge the outcome of the investigation.

On 28 October 2009 and on 12 January 2011, the Commission ordered Spain to abolish the corporate tax provision allowing companies to amortise over 20 years the "financial goodwill" deriving from acquisitions of shareholdings in foreign countries. The Commission also limited the recovery of the unlawful aid, due to the existence of legitimate expectations for some beneficiaries (see case SA.22309). Spain committed not to grant the exemption to any new beneficiaries but did not abolish the provision, as amortisation is still possible in certain cases where the Commission recognised legitimate expectations or authorised a transitory period.

However, in March 2012 the Spanish authorities adopted a new binding administrative interpretation, extending the scope of application of the measure, which would now also be applicable to financial goodwill deriving from indirect acquisitions.

The Commission takes the preliminary view that this new interpretation involves state aid, since Spain is unduly enlarging the application of an illegal and incompatible scheme. At this stage, the Commission also considers that beneficiaries of this new interpretation have no legitimate expectations since their situation (tax benefits derived from indirect acquisitions) was not covered by the scope of the original measure at the time of the adoption of the 2009 and 2011 Commission decisions.

The Commission will now investigate to confirm whether the new interpretation involves state aid or not and, in the affirmative, whether such aid is in line with EU state aid rules. If the Commission finds that the amended scheme is incompatible with state aid rules, Spain may need to recover the aid already granted from the beneficiaries. Therefore, in order to avoid more public spending that may have to be recovered afterwards, the Commission has ordered Spain to stop applying the new administrative interpretation until the Commission has taken a final decision on its compatibility (suspension injunction).

Comments may be submitted within one month from the publication of today's decision in the EU's Official Journal.


In October 2007, the Commission opened an in-depth investigation into a Spanish corporate tax law provision (Article 12(5) TRLIS) over concerns that it provided an advantage for Spanish companies acquiring foreign entities (see IP/07/1469). The law provided that a Spanish company could amortise the 'financial goodwill' resulting from the acquisition of a shareholding of more than 5% in a foreign company during the 20 years following the acquisition.

In October 2009, the Commission concluded that the scheme amounted to incompatible state aid in that it treated more favourably Spanish intra-EU acquisitions as compared to Spanish-Spanish transactions, without any objective reason (see IP/09/1601).

The Commission kept the investigation open with regard to acquisitions in non-EU countries in order to examine evidence that Spain had committed to provide. Spain argued that the measure was needed to offset obstacles faced in non-EU countries. Legal obstacles would make it impossible to perform a cross-border business combination. As a consequence of these barriers, Spanish companies investing abroad would be placed in a different situation than the ones investing domestically. However, the Commission could not identify any explicit obstacles in the vast majority of the more relevant third countries whose legislation it examined.

In January 2011, the Commission therefore concluded that the provision amounted to incompatible State aid also as regards (most) extra-EU acquisitions. Spain was asked to repeal the provision for acquisitions outside the EU and to recover any aid granted except for those cases where legitimate expectations exist (see IP/11/26).

The non-confidential version of today's decision will be published in the EU Official Journal and made available under the case number SA.35550 in the State Aid Register on the DG Competition website. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13 - Twitter: @ECspokesAntoine )

Marisa Gonzalez Iglesias (+32 2 295 19 25)

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