(Bloomberg) --
The European Union got a boost in its crackdown on tax breaks for Spanish companies buying stakes in foreign firms after EU judges said a challenge involving Banco Santander SA was inadmissible.
The EU Court of Justice rejected a Spanish tax tribunal's request for guidance on the validity of European Commission decisions that found those tax breaks violated the bloc's state aid rules. The Central Tax Tribunal of Spain doesn't satisfy the criteria of independence to be seen as a court or tribunal, the EU judges ruled.
The case stems from a European Commission decision in 2014 ordering Spain to recoup tax breaks from companies that benefited from the regime, saying it amounted to illegal state aid. It follows previous judgments by the EU courts in 2016 and 2018 that backed a similar commission crackdown on the Spanish benefits doled out to companies including Banco Santander.
The EU decision in the latest case targeted a 2012 amendment to the Spanish measure expanding the scope of the tax-break to acquisitions in foreign holding companies.
Any guidance from the bloc's court could have fed into separate appeals by Apple Inc. and Amazon.com Inc. as they seek to overturn EU tax orders, amid a six-year crackdown by EU Antitrust Commissioner Margrethe Vestager on controversial fiscal deals for multinationals.
Santander declined to comment on the ruling.
While the EU courts have so far backed the commission's right to attack national fiscal deals or tax regimes, Vestager has suffered a number of defeats in the past year, mainly on procedural grounds.
The case is: C-274/14, Banco de Santander, S.A.
--With assistance from Charlie Devereux.
To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.net
To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Peter Chapman
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