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European Commission - Fact Sheet

State aid: Commission welcomes Court judgment in Spanish Goodwill cases

Brussels, 21 December 2016

The EU Court of Justice has fully upheld two Commission decisions of October 2009 and January 2011, regarding the tax amortisation of financial goodwill for foreign shareholding acquisitions in Spain.

The European Commission welcomes today's judgment by the EU Court of Justice fully upholding two Commission decisions of October 2009 and January 2011, regarding the tax amortisation of financial goodwill for foreign shareholding acquisitions in Spain (joined cases C-20/15 P and C-21/15 P). In doing so, the Court set aside an earlier ruling by the General Court from November 2014.

The Commission in its decisions had concluded that, by allowing companies to deduct the financial goodwill arising from shareholdings in foreign companies from their corporate tax base, the Spanish measure gave those companies a selective advantage over their competitors in breach of EU state aid rules. Today's judgment confirms this finding.

The judgment is important because it confirms that a measure may be selective, if it benefits only those companies that carry out certain transactions. The Court of Justice confirmed that a tax measure is selective when it derogates from the reference tax regime and applies a different treatment to companies that are in a comparable situation, unless such a differentiation is justified by the nature of the tax regime. This is the case even if the measure is in principle open to all companies. The fact that the conditions that a company needed to fulfil were not strict, and the benefits were therefore available to many companies, does not call into question the selective nature of the measure but only its degree of selectivity.

The Court of Justice also sided with the Commission in that the General Court misapplied standing EU case law relating to aid for exports.

In terms of next steps, the Court of Justice has referred the cases back to the General Court for a re-assessment in light of today's judgment. As a result of the judgment, the Commission decisions of October 2009 and January 2011 are reinstated, including Spain's obligation to recover the aid granted under the measure. The Commission will now work with the Spanish authorities to implement them.  

Moreover, Spain must now also carry out the recovery ordered in the Commission decision of October 2014, finding that Spain's new interpretation of the tax measure had extended its scope. In this case, the Commission had agreed not to pursue actively the recovery until the Court of Justice delivered its judgments in the present cases.


For a chronology of the different Commission decisions concerning Spanish goodwill, please see here.

In 2002, Spain introduced a special tax scheme, derogating from the normal tax regime, granting corporate tax deductions to companies resident in Spain that would buy shares and bonds of foreign companies. In particular, the measure allowed these companies to deduct from their corporate tax base the so-called financial goodwill, i.e. the difference between the costs of acquisition of the shareholding of the target company and the market value of the underlying assets of that company. The deduction was allowed for a period of up to 20 years following the acquisition. In contrast Spanish companies making domestic acquisitions were subject to the normal tax rules and could not benefit from the measure.

Following a complaint by a private operator alleging that the measure distorted competition in the Single Market, the Commission opened an in-depth investigation in 2007. In October 2009 the Commission concluded that the scheme treated intra-EU acquisitions more favourably than domestic transactions without any objective reason, in breach of EU state aid rules, and ordered Spain to recover the incompatible aid from the beneficiaries. 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. In January 2011, the Commission adopted a second decision concluding that the tax scheme amounted to incompatible State aid also as regards the majority of extra-EU acquisitions.


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