Press Release: State aid: Commission requires Spain to abolish tax scheme favouring acquisitions of other European companies

The European Commission requested Spain, under EC Treaty state aid rules, to abolish a Spanish corporate tax provision that allows Spanish companies to amortise goodwill (i.e. write off over a period of time the excess price paid for the acquisition of a business over the market value of the assets composing it) deriving from acquiring a stake in non-Spanish companies. After an in-depth investigation, opened in October 2007, the Commission concluded that the scheme distorts competition within the Single Market because it confers an unjustified advantage to Spanish companies especially in the context of competitive takeover bids. The Commission therefore ordered Spain to recover any unlawful aid granted under this provision as regards European acquisitions since 21 December 2007. As regards the application of this provision to acquisitions outside the EU, the Commission will continue its investigation.