December 2021





Following the path of tax audits stemming from the ECJ’s rulings of February 2019 (the “Danish cases” rulings), the Spanish Tax Authority has taken an official position on the subject by publishing a report that concludes that the special anti-abuse procedure may apply to certain financing schemes using EU based conduit lenders, and that taxpayers may be subject to penalties in the future.



The Spanish Tax Authority has reacted to the adverse rulings of the National Court (Audiencia Nacional) of 21 May 2021 (see Newsletter of June 2021) by publishing a report on abuse of law which sets the stage for future tax audits on the application of a withholding tax exemption on Spanish source interest and  dividends paid to EU resident lenders and shareholders, respectively. The report centres on an audited case involving intragroup loans in which a Spanish subsidiary is financed by a Dutch resident entity that in turn is financed by the group’s US parent entity.

Based on up to 14 indicia, the report concludes that the Dutch company is a mere conduit company without real substance used to take (undue) advantage of the EU withholding tax exemptions. Accordingly, it determines that the US parent company is the beneficial owner of the Spanish source interest and that the withholding obligations set out in the US-Spain Tax Treaty should apply.

The report does not accept that the structure ceases to be deemed an abusive practice solely because of the substantial spread on interest earned and paid by the Dutch company.

Furthermore, the report states that, according to Spanish procedure law, the tax auditor should abide by the specific anti-abuse procedure set out in article 15 of the General Tax Law, which requires that an ad hoc committee issue a report confirming that the scheme is abusive.

By publishing the report on its website, the Spanish Tax Authority opens the door to imposing penalties in “substantially similar” cases to the one it describes in the report. That said, under Spanish law, it may only impose penalties with respect to interest withholding tax obligations accruing after the report was published, but not before. 

Our Inspection Procedures and Tax Litigation team is available to answer any queries you may have.



In case of any doubts or comments, please do not hesitate to contact:


Miguel Cremades Schulz


Gloria Marín Benítez



Guillermo Canalejo Lasarte


David López Pombo




The information contained in this newsletter is of a general nature and does not constitute legal advice