Brussels, 23/08/2000 (Agence Europe) - The European Commission has decided to send Spain a reasoned opinion for tax discrimination towards foreign shareholders. On receipt of the opinion, the Spanish authorities will have two months to provide a satisfactory response, otherwise the Commission could turn to the European Court of Justice.
The European commission is targeting an Article in Spanish law (Article 103.3) on company tax, concerning cases of total or partial takeovers of a company by another (through the purchase of its shares, which then lapse and are cancelled). This provision provides for the "acquiring company" to be taxed differently, depending on whether the shares were acquired from a Spanish or foreign resident. Indeed, it provides for the difference between the value of the shares purchased and the assets received from the acquired company being made into a fixed asset and entered into the balance sheet as such, but that if the shares have been purchased from Spanish residents, this difference may be depreciated by up to 10% per year, whereas if they come from shareholders residents in another Member State, this depreciation is not possible. "The legislation in question thus discourages residents of other Member states who are liable for capital gains tax from investing their capital in companies headquartered in Spain by preventing them from selling their shares to Spanish companies on the same terms as Spanish residents. The legislation also impedes companies established in Spain by hampering their access to capital or purchases of shares from residents of other Member States who are liable for capital gains tax", the Commission states.