Author:
Miriam Sánchez Gonzalez.
Intragroup transactions, justifying is key
In an ever more demanding business environment, the decisions regarding assets and taxes within a group require a well-founded strategy. The recent actions of the Tax Inspectorate in cases of capital reduction and transfer of assets make it clear that certain operations, although apparently legal, can be interpreted as conflictive if their main effect is tax savings.
What is a conflict in the application of the tax law?
This concept, provided for in the General Tax Law, is applied when the transactions carried out by a company have no relevant economic or legal justification beyond reducing the tax burden. A recent example illustrates how capital reductions with return in kind and transfer of assets can be interpreted as artificial if their sole purpose is to offset tax benefits and minimize the tax base.
The risks of managing operations without expert advice
- Fines and penalties: Improperly raised transactions may not only result in tax adjustments, but also in significant financial penalties.
- Impact on the group’s real liquidity: By focusing solely on tax savings, the company’s asset and operating structure may be compromised.
- Assessment of artificiality: The temporal correlation between transactions and the absence of economic effects beyond tax savings are red flags for the Inspectorate.
The importance of having a specialized team
The correct planning and execution of this type of operations requires a deep knowledge of tax regulations , as well as a strategic vision of business management. At Cigarrán Abogados, we understand the complexity of these decisions and offer comprehensive advice that not only guarantees regulatory compliance, but also optimizes tax and equity decisions within a group.
How to avoid tax conflicts in complex transactions
- Sound economic justification: All transactions must have a purpose beyond tax savings, such as asset reorganization or business structure optimization.
- Adequate valuation of assets: Items involved in capital reductions and transfers must have up-to-date and objective independent valuations.
- Planning and documentation: Each step must be supported by a clear strategy and documents that evidence its legitimate purpose.
Trust an expert team to protect your business
Specialized advice is key to avoid conflicts with the Tax Inspection and to ensure the success of the operations within a group. At Cigarrán Abogados, we have a team of experts in taxation and business management that will accompany you every step of the way. Our objective is that you make informed, safe and beneficial decisions for your company.
Do you have doubts about your tax operations? Contact us and secure your company’s future.
¿Do you need hel? At Cigarrán Abogados we can help you (+34) 91.355.85.15
