|Mulligan, Mark, Pignal, Stanley
The European Commission has requested Spain, under EC Treaty state aid rules, October 2009, 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 (see IP/07/1469 ), 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 has 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.
The European Commission has demanded that a tax break that fuelled a spate of Spanish international mergers and acquisitions during the credit bubble be abolished and some of the money refunded.
|Countries / Regions