The TEAC rulings in 2024 on holding companies have shattered the peace of mind of many firms. Have you restructured your group in recent years? This affects you. It doesn’t matter if the operation was clean, with economic motives and serious advice. It doesn’t matter if you had a binding report from the DGT. Because now the Inspectorate is re-reading the FEAC regime with a magnifying glass and changing criteria. And yes, we are talking about direct tax consequences. There is no room for mistakes here. Nor is there room for complacency. We tell you what is happening. And how to prepare.
TEAC changes
They didn’t say it in those words. But that is what is happening. The TEAC rulings in 2024 on holding companies introduce a twist: it is no longer enough to formally comply with the requirements of the special tax regime. Now substance is required. Business justification. Translated: if your operation has no real economic logic, you may be left without tax deferral.
The linchpin of it all? Article 89.2 of the LIS. The TEAC has put it at the centre. It says that if the main purpose of a restructuring is fiscal, the regime does not apply. Even if you comply with everything else.
Second point: economic motives. They cannot be generic. They have to be clear, precise, real. The simple search for tax efficiency is no longer valid. The holding company must have its own activity or a specific role in the group…
Third change: deferred taxation is no longer granted automatically. It can now be applied progressively. What does this mean? That if, years later, dividends are distributed or shares are sold and the tax authorities smell abuse, they can regularise. A posteriori. Even if the operation was «clean» at the beginning. This is new. And disturbing.
Inspection is on its own
The problem does not end with what the TEAC says. It starts with how the Inspectorate interprets it. And what we are seeing is not reassuring. In 2024, several files show that this criterion is being applied in an expansive manner. Very expansive. Even when there are favourable opinions from the Directorate General for Taxation. The Inspectorate ignores them. It considers that if the operation lacks valid reasons, it can regularise anyway. This is a sharp turn of events. And it creates legal uncertainty.
But there is more. The four-year tax statute of limitations seems to be blurring. In some cases, it is intended to review operations from a decade ago if there are recent dividends. They justify this by saying that the «abusive effect» is materialising now. In other words, the abuse is not in the initial transaction, but in what you do with it afterwards. That, for many advisors, is playing with the rear-view mirror. The result? Companies reviewed for operations closed years ago. And with no margin to defend themselves.
Moreover, real operations are being questioned. With substance. With logic. With structure. But which, in the inspector’s opinion, have «the smell of taxation». This subjective criterion is being used as a basis for liquidations. And it is dangerous. Because it makes any business decision potentially suspect.
What you can do if you have a holding
First, don’t panic. But don’t ignore this either. If you have a holding company within a group, you need to act. Review. Document. Justify. Because even if the operation is years old, what you do now may be the trigger for a future inspection.
Step one: identify the restructurings made under the FEAC regime.
Step two: analyse the economic reasons that justified them.
Step three: check whether the holding company has real activity. Personnel. Functions. If not, it is time to strengthen its role. Or rethink the structure.
Step four: prepare clear documentation. Not just minutes or deeds. Business plans. Forecasts. Internal justifications. And keep everything. Because the TEAC has already made it clear that what matters is not what you signed, but what you did and why.
We at Confianz help many companies to resolve this type of situation. We know how to talk to the administration. How to defend operations if the time comes. And, above all, how to restructure with real business logic. Because the FEAC regime is still useful. But now it requires more rigour. More analysis. More head.
And no, this is not a fiscal fad of the moment. It is a paradigm shift. The TEAC rulings in 2024 on holding companies mark a before and after. Ignoring it is not an option. Prevention is your best defence.
These resolutions do not prohibit restructuring. Nor do they prohibit the use of holding companies. But they do force you to justify everything more clearly. With more economic sense. With more documentary support. Don’t improvise. Don’t copy other people’s structures. Don’t think that everything has been done because it worked years ago. The context has changed. And so has the Inspectorate.
Shall we review your structure together?