Brussels, 15/10/2014 (Agence Europe) - On Wednesday 15 October, the European Commission ordered the Spanish authorities to recover illegal state aid granted in tax benefits in favour of acquisitions abroad.
The measure is not a new one and has already been the subject of two decisions by the Commission. In 2009, the Commission found it to be incompatible with EU rules on state aid and the tax provision which allows Spanish companies to amortise business assets over 20 years, in the event of the acquisition of more than 5% of the shares in another EU member state. The Commission continued its investigation as regards companies outside the EU, as the Spanish authorities had argued that the measure was required in order to compensate for the legal obstacles encountered in third countries. In 2011, the Commission's investigations revealed that in the vast majority of cases, there were no specific obstacles. The Commission therefore called on the Spanish authorities to end the provision and to recover the aid, with the exception of a number of cases. Spain undertook not to grant this benefit to new beneficiaries, but did not repeal the provision, on the grounds that it was legitimate in certain cases.
In 2012, the Spanish authorities adopted a new interpretation which extend this tax provision to indirect acquisitions of a stakeholding in the company through the acquisition of non-resident Spanish holding companies. It is this interpretation which is now the subject of a Commission decision.
At the end of an investigation which started in July 2013, the Commission concluded once again that the said tax regime granted a selective economic benefit which cannot be justified in the light of EU rules on state aid. The Spanish state has therefore been ordered to recover this illegal aid. The Commission stipulates that Madrid must provide it with information on the beneficiaries and the amounts in question. According to the Spanish daily newspaper El Pais, Telefonica, Iberdrola and the bank Santander are reported to be involved.
As to the amounts at play, the Commission pointed out that the measure concerned an amortisation over 20 years and that a proportion of the deduction was therefore not applied. Furthermore, when it opened its investigation in 2013, it sent Spain an injunction to suspend the measure.
As regards the aid under the two earlier regimes, the Commission observed that the recovery of this aid was well underway and indeed nearly complete. (EL)