Spanish Supreme Court limits Tax Agency powers over holdings and administrators

The Spanish Supreme Court has issued rulings that limit the authority of the Tax Agency (Hacienda) regarding the regularization of family holdings and the pursuit of tax debts from company administrators.

In a decision concerning family holdings, the Court ruled that the Tax Agency cannot automatically annul the entire tax benefits of a reorganization under the FEAC regime simply by identifying an abuse. Instead, the administration must specifically identify the abusive tax advantage, provide evidence of its pursuit, and limit the regularization only to the extent necessary to neutralize that specific advantage.

In a separate matter regarding corporate liability, the Court established that when a company has been dissolved, liquidated, and extinguished, the Tax Agency cannot directly hold an administrator responsible for tax debts. The administration must first declare the company’s partners as insolvent and demonstrate that the debt cannot be collected from them before pursuing the administrator for subsidiary responsibility.