Spanish tax authorities deem a series of consecutive intra-group share transfers as abusive and potentially subject to penalties in binding report

During a tax audit procedure, the Spanish tax authorities (STA) challenged the application of the United States (US)-Spain Tax Treaty exemption on capital gains derived from the transfer of shares in a Spanish subsidiary.

The challenge was based on the application of the General Anti-Abuse Rule (GAAR), on the grounds that the overall transaction, consisting in a series of consecutive intra-group share transfers, was artificial and an improper form to achieve the intended result.

The GAAR Advisory …