Publicado: 26-03-2025
In recent months, the creation of holding companies for the reorganization of family assets has come to a significant halt. These structures, traditionally used by companies to optimize tax burdens, facilitate generational succession, and centralize business control, are now under scrutiny by the Spanish Tax Administration.
A series of recent rulings by the Central Economic-Administrative Court (TEAC) has introduced a new interpretative approach, generating legal uncertainty and placing many corporate restructuring operations on hold.
What is a holding company and why was it used?
A holding company is an entity whose main function is to own and manage shares in other companies. It acts as the "parent" of a group of subsidiaries and has been a key tool for business groups, particularly family businesses, for the following reasons:
However, this regime requires that the transaction has valid economic reasons beyond merely obtaining a tax advantage.
The TEAC`s new approach: A disruptive shift
Since spring 2024, the TEAC has issued several rulings on the taxation of contributions of shares and participations to holding companies and the application of the FEAC Regime. The two main arguments behind this new approach are:
Deferral of income
The TEAC considers that if the primary purpose of the transaction is to defer taxation, this constitutes an undue tax benefit. Consequently, such deferral must be invalidated.
Regularization based on dividends
The current criterion states that the regularization of contributions must occur as the dividends related to the operation are received.
Practical implications: A halt in family reorganizations
These decisions have had a strong impact on family business groups, where the creation of holding companies was a common practice. Now, many restructuring operations are being postponed or canceled due to fears of penalties and tax reassessments.
Appeals before the National Court: Prolonged uncertainty
Several of the TEAC`s rulings have already been appealed before the National Court, opening the door to a lengthy judicial process. Even if decisions are eventually favorable to the taxpayer or the administration, it is likely that the matter will reach the Supreme Court, further extending the uncertainty.
What does the future hold for holding companies?
The use of family holding companies for asset reorganization is currently on hold until greater legal clarity is achieved. In the meantime, it is recommended to carefully document the valid economic reasons behind each transaction, seek prior consultation with the Directorate General for Taxation, and avoid purely tax-motivated operations that could be challenged by the Tax Authority.
Conclusion
The TEAC’s new interpretation marks a turning point in the use of holding companies. The resulting legal uncertainty is placing many family and business groups in a difficult position, showing how interpretative changes can significantly impact the business ecosystem.
At Gentile Law, we have a team specialized in taxation, corporate reorganizations, and complex holding structures. We guide our clients through the entire process—from legal and tax assessment of the transaction to drafting documentation, negotiating with the tax authorities, and, if necessary, defending their interests in court. If you are considering a corporate or asset restructuring, we can help you make informed decisions, minimize risks, and protect your assets.
Marta Batalla Eguidazu
martabatalla@gentile.law
+34 684 46 04 26
