Tax Newsletter - November 2014


On November 7, 2014, the General Court of the European Union handed down judgments on the Autogrill España (T-219/10) and Banco Santander and Santusa Holding (T-399/11) cases. In both cases, it held that article 12.5 of the Revised Corporate Income Tax Law (which permits amortizing goodwill derived from the acquisition of shares in nonresident entities) does not constitute State aid whether the acquired entities are European Union residents or otherwise . On that basis, the Commission Decisions on both cases have been overturned.

The judgments are mainly based on the absence of selectivity in the measure in question, as it is potentially available to all companies.

Readers are reminded that this same year, the Commission adopted a third decision on this matter (dated October 15, 2014) where it defended the existence of new State aid due to the change in administrative practice (based on a tax ruling of 2012) when calculating financial goodwill in acquisitions of foreign entities with second-tier holdings.

In this latter proceeding, the Commission issued a decision on July 17, 2013, not only formally initiating the proceeding which would lead to the last decision, but also ordering Spain to cease applying this new interpretation. Although the above-mentioned judgments did not analyze this third decision, it seems reasonable to assume that the legal basis for this last decision depends on the lawfulness of the two previous decisions.


I. Judgments

  • 1. Corporate income tax.- Real estate developer is not an asset-holding company even if it does not perform development activity directly (Supreme Court. Judgment of October 27, 2014)
  • 2. Corporate income tax.- On the scope of “valid economic reasons” for purposes of the special regime (Supreme Court. Judgment of October 27, 2014)
  • 3. Corporate income tax.- Tax amortization of financial goodwill (article 12.5) does not constitute State aid (General Court of the European Union. Judgments of November 7, 2014, in cases T-219/10 and T-399/11)
  • 4. Income tax.- A provision entailing flat-rate taxation of the income from investment funds is contrary to the free movement of capital even if it is justified by the breach of the reporting obligation (Court of Justice of the European Union. Judgment of October 9, 2014. Case C-326/12)
  • 5. Personal income tax.- Value of compensation in kind for the supply to employees of airplane tickets without seat reservation (Supreme Court. Judgment of October 16, 2014)
  • 6. Personal income tax.- Consolidation of legal title entails a new assignment of the assets to the economic activity (National Appellate Court. Judgment of June 4, 2014)
  • 7. Personal income tax.- Reduction for joint taxation does not apply where taxpayer lives with the other parent of their children in common (Castilla y León High Court. Judgment of May 23, 2014)
  • 8. Refund of taxes contrary to Community law.- On the procedure for recovery of unlawful State aid (Supreme Court. Judgments of October 1 and 9, 2014)
  • 9. VAT.- The wording of a provision in force in a fiscal year after that inspected must be applied if that new wording is supported by Community case law (National Appellate Court. Judgment of September 17, 2014)
  • 10. Inheritance and gift tax.- A capital gain obtained exceptionally must not be taken into account to calculate the main source of income (Extremadura High Court. Judgment of June 24, 2014)
  • 11. Real estate tax.- It is not possible to contest the cadastral classification of a plot by contesting the real estate tax assessment (Cataluña High Court. Judgment of June 5, 2014)
  • 12. Administrative proceeding.- Recognition of the “two shot” rule (Supreme Court. Judgments of September 15 and 29, and October 16, 2014)
  • 13. Management proceeding.- On tax relevance in information requirements (Supreme Court. Judgments of October 20 and 23, 2014)
  • 14. Collection proceeding.- The enforced collection surcharge must be calculated on the proportional part of the debt the pertains to the secondarily liable party (National Appellate Court. Judgment of September 22, 2014)
  • 15. Review proceeding.- Proof must be provided in the inspection (Supreme Court. Judgment of October 17, 2014)

II. Decisions and rulings

  • 1. Corporate income tax.– Revenues are not recognized for the compensation received in provisional enforcement of a judgment that has been contested by the defendant (Directorate-General of Taxes. Ruling V2395-14, of September 11, 2014)
  • 2. Personal income tax.– Deductibility of contributions to the social security system of other States of the European Union (Directorate-General of Taxes. Ruling V2536-14, of September 30, 2014)
  • 3. Personal income tax.- Billing by professionals or entertainers to their company must coincide with that of the company to third parties minus the necessary expenses for performing the activity (Central Economic-Administrative Tribunal. Decision of September 11, 2014)
  • 4. Personal income tax.– Tax treatment of severance pay for individual dismissals (Directorate-General of Taxes. Rulings V2273-14 and V2275-14, of September 4, 2014)
  • 5. Personal income tax.- Application of the reduction for multi-year income to the compensation received pursuant to agreement to access partial retirement (Directorate-General of Taxes. Ruling V2250-14, of September 3, 2014)
  • 6. Value added tax/Transfer and stamp tax.- Status of VAT taxable person not acquired in case of transfer of rural property included in development plan, in respect of which physical transformation works have not yet been carried out on the land (Central Economic-Administrative Tribunal. Decision of October 23, 2014)
  • 7. Transfer and stamp tax.- Recovery of ownership of an asset as a consequence of court-ordered termination of a contract (Directorate-General of Taxes. Ruling V2257-14, of September 3, 2014)
  • 8. Administrative proceeding.- A refund application tolls the limitations period on the right to obtain the relevant refund even if the refund proceeding chosen is not the appropriate one (Central Economic-Administrative Tribunal. Decision of September 16, 2014)
  • 9. Penalty proceeding.- The 25% reduction does not apply where the taxpayer requests a deferral or payment in installments of the penalty with offer of guarantee other than a bank guarantee or surety bond certificate, even if he pays within the deferral or installment payment period granted (Central Economic-Administrative Tribunal. Decision of September 30, 2014)
  • 10. Penalty proceeding.- The Chief Inspector has the authority to impose a penalty even though he modifies the penalty proposal made by the inspectors, insofar as that modification does not involve any act of inspection or, thus, modification of the proof (Central Economic-Administrative Tribunal. Decision of September 16, 2014)
  • 11. Collection proceeding.- For ex officio set-off to be possible, the enforcement period must have commenced and the order initiating enforced collection must have been notified (Central Economic-Administrative Tribunal. Decision of October 30, 2014)

III. Legislation

  • 1. Changes introduced in the scope of the various information returns
  • 2. Approval of form 410, prepayments of the tax on deposits at credit institutions, and changes to form 190, annual summary of personal income tax withholdings and prepayments
  • 3. Changes in the area of registration and management of powers of attorney, successions and legal representation of minors and disabled persons for completing formalities and steps online with the Tax Agency

IV. Others

  • 1. The Tax Agency launches a new VAT management system
  • 2. The draft personal income tax regulations are made public for observations


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