Suspension of the Merger Operation
In Spain, in the event of an unauthorized merger, it is advisable to request precautionary measures of suspension to prevent the procedure from concluding with a final outcome. In fact, merger procedures that have been carried out in compliance with the regulations cannot be challenged. This means that the shareholder or creditor harmed by the procedure can only claim damages through an ordinary court procedure, but cannot annul the merger itself.
Spanish special Tax regime for M&A.
The special tax regime for mergers and acquisitions cannot be excluded due to merely formal defaults.From the judgment of the European Court (First Section) of March 8, 2017, it is clear that EU law authorizes member states to condition the application of the special tax regime for mergers and acquisitions on specific requirements or conditions.
The Spanish tax regime is conditioned upon a prior authorization procedure, within which the taxpayer must demonstrate that the transaction in question is justified by an economic reason, that its primary or one of its main objectives is not tax fraud or evasion, and that its structure ensures the future taxation of capital gains on a tax-deferred basis.
However, the application of this special tax regime cannot be excluded for purely formal defaults, such as the failure to notify the merger to the tax authorities.
