Spain has won against European Union for tax breaks intended to help its companies buy stakes in foreign firms, where EU regulators’ campaign against tax deals they view as illegal subsidies.
The EU court has ruled in Spain’s favor regarding the country’s use of tax breaks to support companies acquiring foreign shareholdings. Under the Spanish law on corporation tax, where a company which is taxable in Spain, acquires a shareholding in a “foreign company” of at least 5% and holds it without interruption for at least one year.
On October 15, 2014, the Commission had said that it had found that the measure provided the beneficiaries with a selective economic advantage which cannot be justified under European Union state aid rules, and which must now be repaid to the Spanish state. Three Spanish companies – Autogrill España, Banco Santander and Santusa Holding – subsequently brought an appeal before the General Court, asking for the Commission decisions to be annulled.
On November 7, 2014, the Court ruled in favor of the companies and the Spanish rules, stating that “the Commission failed to establish the selective nature of that regime.”
