The EU Commission has found Spain to be in breach of State Aid rules in respect of a corporate tax provision that allows Spanish companies to amortise goodwill derived from acquiring non-Spanish companies. The scheme constitutes state aid as it provides selective advantages to Spanish companies engaged in acquiring non-Spanish European companies as compared to Spanish companies acquiring shares in other 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 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.

Full details of the EU's press release on the matter are available from http://europa.eu/index_en.htm