2023-09-27 15:53:21
Wednesday, September 27, 2023, 12:23 | Updated 3:53 p.m.
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The General Court of Justice of the European Union (TGUE) has endorsed this Wednesday the Spanish tax deductions in the indirect acquisitions of multinationals in foreign companies. The European ruling thus annuls the decision of the European Commission to declare illegal the Spanish aid that affected companies such as Telefónica, AXA and Banco Santander, among others.
The Government of José María Aznar introduced these deductions in 2002. This aid regime “allowed companies that had acquired shares in non-resident companies to deduct from the tax base, through amortization, the financial goodwill derived from that acquisition.” Brussels assured in 2006 that the Spanish regime “did not fall within the scope of application of the Union rules on State aid” and began an investigation into the matter.
Years later, in 2014, the European Commission ruled that the Spanish Government’s measures were “incompatible with the internal market” and ordered them to be withdrawn. Spain and various affected companies asked the European Justice to annul the Brussels decision, ensuring that the Community Executive erred in classifying the new administrative interpretation as “new aid” and that it “violated” the principle of legal certainty and the protection of the legitimate trust.
In its decision this Wednesday, the TGUE considers that the European Commission “was not empowered” to withdraw the Spanish tax deduction regime. And, even if it had been empowered to make this decision, the European Justice points out that Brussels “committed an error of law by denying the recognition of a legitimate expectation similar to that recognized in the initial decisions to the beneficiaries of the aid scheme in question with respect to their indirect acquisitions.
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