Treasury will have to return 48 million euros to large companies like Easter, Heineken o Panini after a change of criteria from the supreme court has overturned the way a corporation tax deduction is calculated.
The first case recorded by this newspaper is that of Panini, the Italian company world leader in the sale of trading cards. In July 2021, the Supreme Court ruled in his favor and authorized the return of 1.5 millions of euros paid as corporation tax between 2009 and 2011.
This first ‘yes’ opened the door for other large companies, which had already had litigation open to the courts for years due to what happened in similar periods of time and which just a few months earlier had seen their appeals rejected, could receive a verdict favorable. The decision to change the criterion from that which had been set by the Second Section of the National Hearing Chamber in 2017 was taken at the Supreme Court unanimously.
Among other reasons, the high court argues that the law already recognizes the tax incentive for companies that want to include in their promotional material a reference to these events of “exceptional” public interest, so the deduction yes that would be correct.
Change of criteria
This is what he found Newspaper of Girona, through the court documents to which he has had access and in which these amounts are not only confirmed, but the door is also opened for new claims to arrive. For example, the company that owns Asturian Dairy Centerwhich has already seen a settlement against it annulled for a value of 10.3 million euros, has opened another appeal for 8.1 million.
How to calculate the 15% corporation tax deduction for propaganda and advertising expenses for the dissemination of events of exceptional public interest
In this way, what at first was an irregularity for the Justice, from the change of mind of the Supreme becomes a correct interpretation of the law. This closes, in principle, a dispute that had been open for years in the courts about “how to calculate the deduction in corporate tax of 15% of propaganda and advertising expenses for the dissemination of exceptional events interest public”. That is, which ones tax benefits must have for companies that, for example, Mahou decides to promote in his merchandising the Guadalupe Jubilee Year, as it did in 2007 and 2008.
In the case of mahou san miguelthe brewery’s parent company, the Treasury will have to pay back almost 1.1 million euros for the 2008 and 2009 fiscal years after last December the Supreme Court ruled in favor of the tax authorities for this deduction and annulled a million dollar fine. So far, however, it has not been the first return nor the most valuable.
15.5 million euros
The company that would have recovered the most money in this way would be, according to the documentation to which it has had access, the Castellana de Begudes Gaseoses (Casbega), one of the main bottlers of Coca Cola.
The company, which became part of a single concessionaire for Spain, Portugal and Andorra in 2013, should return this way around 15.5 million euros for the years 2004 to 2007. Refrescos Envasats del Sud, another of the companies that became part of this concessionaire and that promoted the Beijing Olympic Games in 2008, for example, will recover 247.000 euros .
The change of criteria, and therefore direction of the Supreme Court, has meant that in the second half of 2022 there will be a succession of rulings favorable to companies. For example, Hesa, SA, the parent company of Heineken, received a ‘no’ in this same court in 2021 for this issue, but, just a year later, in the framework of several similar decisions, his appeal was upheld. in play 8.5 million euros which correspond to corporate tax for the years 2010 to 2012.
He had the same route Danone waters SA, the division of Danone that includes brands such as Font Vella, Evian or Lanjarón and which managed to have a dispute of almost 2.6 million euros resolved in its favor mandarin he had received a refusal of his appeal only a year earlier.
A similar amount to that of Heineken was also disputed by Corporación Alimentària Peñasanta (CAPSA), parent of brands like Asturian Dairy Centerwhich in mid-2022 also saw the Supreme Court unanimously annul the 10.3 million euro settlement imposed on it by the Central Administrative Economic Court in 2016 for corporate tax from 2007 to 2009.
Pascual, its main rival in the milk market, has also benefited from this change in criteria, since in a ruling in November 2022 a claim by the Treasury against it worth almost 2.6 millions of euros. On similar dates, Ebro Foodsthe company that shelters brands such as SOS, Brillante or La Fallera, managed to annul the liquidation of 5.8 million euros.
This is not about incentivizing companies to spend extra, as none would probably do that in return for a 15% deduction of that extra spend
In the judgment of Pascual, in addition, it explains a little more about the reason for this turn, since, as it is explained, “it is not about encouraging the realization of an additional expenditure by the companies, since probably none would do so in exchange for a deduction of 15% of this additional expenditure.” That is to say, that, by itself, sponsor events in its packaging and merchandising would not be motivated by this possible tax reduction. Consulted by this newspaper, the companies mentioned in this article did not want to comment on this.