The inspection of holding companies following the 2024 TEAC rulings has intensified tax scrutiny of corporate structures that use the special FEAC regime. The interpretative changes made by the Central Economic-Administrative Court mark a turning point in the supervision of these operations. Companies can no longer rely solely on formal compliance with legal requirements.
The rulings of 22 April, 19 November and 12 December 2024 have established stricter criteria. The TEAC now examines in greater depth the valid economic reasons justifying each operation. This new doctrine has a direct impact on corporate restructuring and tax planning strategies for corporate groups.
The creation of holding companies has slowed considerably due to fears of the tax authorities. Tax advisers report «brutal legal uncertainty» that is paralysing numerous business reorganisation projects. It is therefore essential to understand the new parameters for tax inspection.
The criteria applied by the inspectorate to holding companies following the TEAC 2024 rulings
The most significant change lies in the requirement for valid economic reasons beyond mere tax savings. The inspection must now assess whether there is a real business purpose behind each FEAC transaction. This new approach requires companies to thoroughly document the commercial reasons for their restructuring.
In addition, the TEAC has modified the way in which transactions considered abusive are regularised. Tax advantages can only be regularised to the extent that they are realised. This means that the tax authorities cannot correct the entire latent capital gain in one go.
The court has determined that only the abusive effects of the tax advantage obtained should be eliminated. This modular approach allows tax corrections to be adjusted on a year-by-year basis, as distributed profits materialise or capital gains are realised.
The inspection of holding companies following the TEAC 2024 rulings has also refined its temporal analysis. The control bodies can review future periods when the tax advantages are progressively materialising. This extension in time requires continuous monitoring by companies.
Defensive strategies in the face of the new tax inspection of holding companies
To successfully deal with inspections of holding companies following the TEAC 2024 rulings, companies must implement robust preventive measures. Prior documentation of valid economic reasons becomes the key element of any defensive strategy.
The first line of defence is to reliably prove that the transaction responds to real business needs. This includes expansion projects, operational efficiency, centralisation of resources or improvement in group management. The TEAC does not consider the placement of future profits under a holding company to be abusive when there is business justification.
It is essential that the holding company carries out effective economic activity. It must charge for services at market prices or receive dividends as justified consideration for its role within the group. Merely holding shares without additional activity is insufficient under the new criteria.
Internal control of allocated expenses is another critical aspect. Companies must avoid charging partners’ personal expenses without adequate documentary support. The inspection thoroughly examines whether the expenses truly respond to business needs.
The preparation of adverse scenario tax simulations allows for the anticipation of possible corrections. This proactive planning facilitates informed decision-making on dividend distributions and share sales. In this way, future regularisation does not take the company by surprise.
New tax challenges
At Confianz, we understand that the inspection of holding companies following the TEAC 2024 rulings requires a comprehensive and personalised approach. Our methodology combines exhaustive technical analysis with business pragmatism. We do not impose standard solutions, but rather adapt each strategy to the specific needs of the business group.
Our work process is structured in three complementary phases. First, we carry out an in-depth diagnosis that identifies all FEAC operations carried out, analyses their economic motivation and assesses their vulnerability according to current TEAC criteria. This assessment allows us to determine the actual level of tax exposure.
Next, we develop the supporting documentation and defence strategy. We generate all the necessary documentation to support the company’s position in the event of an inspection. This includes corporate minutes, financial reports, business plans and any other supporting documentation that substantiates the business reasons for the transactions.
Finally, in cases presenting greater risk, we suggest adjustments or restructuring to minimise future exposure. These changes always respect the group’s business logic and do not compromise operational efficiency. The aim is to maintain commercial advantages while reducing tax risk.
What sets Confianz apart is the balance between technical vision and practical application. We do not design sophisticated structures without real economic substance. We are committed to consistency between tax strategy, effective business operations and the ability to defend ourselves before the tax authorities.
The new tax reality requires companies to review their structures with more demanding criteria. It is no longer enough to comply with legal formalities; operations must be justified from a real business perspective. If your group has implemented holding companies or is planning a restructuring, now is the time to evaluate each operation and shield it appropriately.
We invite you to learn more from our tax expert in this video.