Press Release: Direct taxation: The European Commission requests Spain to change its tax provisions related to the exchange of shares

On 25 June, 2009, the European Commission formally requested Spain to change its tax provisions concerning the taxation of capital gains arising from an exchange of shares. The Commission considered some of these provisions to be incompatible with the 'Merger' Directive (Council Directive 90/434/EEC) and with the freedom of establishment and the free movement of capital as laid down in Articles 43 and 56 of the EC Treaty and the corresponding articles of the EEA Agreement. The request took the form of a reasoned opinion (second step of the infringement procedure provided for in Article 226 of the EC Treaty). If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the case to the Court of Justice of the European Communities.