Fiscal neutrality in the financing of the companies. The Spanish case.

AuthorCésar García Novoa
PositionProfessor of Tax Law at the University of Santiago de Compostela, Spain.
Pages1-33
European Tax Studies 1/2010
© Copyright Seast All rights reserved
1
Fiscal neutrality in the financing of the companies.
The Spanish case.
César García Novoa1
1. The principle of neutrality.
Globalization has supposed that the economic agents, both public and private
ones, had restated their strategies and behaviours. VALLEJO CHAMORRO-
GUTIERREZ LOUSA2 says: “in the area of the public thing, the public powers had
to restate both the postulates to which their policies have to serve, and the
instruments that they have for it. This way, there have been giving up
interventionist positions, in which the State was using actively all the instruments
of monetary and fiscal policy that it had to his disposition to act on the functioning
of the market; the principle of redistribution and intervention of the public power
was imposed as a consequence of the bigger autonomous functioning of the
economy. The public powers have had, therefore, to adapt themselves to the idea
of that their action must orientate to the achievement of the efficient functioning
of the economy, and for that aim they must use neutral policies”.
Neutrality means the no interference of the tax system when the economic
operators make a decision, for example at the moment of placing the savings or at
the moment of deciding the forms of private social security.
The neutrality is a principle that, in the last years, has been defined as proper
principle in tax matter: the principle of tax neutrality.
The principle of neutrality has its origin in the postulate of the distributive
neutrality that J. STUART MILL has formulated, according to which the taxation
1 Professor of Tax Law at the University of Santiago de Compostela, Spain.
2 J.M., VALLEJO CHAMORRO-M., GUTIERREZ LOUSA, “Los Convenios para evitar la doble imposición:
análisis de sus ventajas e inconvenientes”, Instituto de Estudios Fiscales, Documento nº 6, 2002, pp.
14-15.
European Tax Studies 1/2010
© Copyright Seast All rights reserved
2
must not modify at all the relative economic-financial situation of the taxpayers.
NEUMARK has indicated that taxes must not provoke distortions in the
competition, considering the principle of neutrality like an institution essentially
transcendent for the economic order. For NEUMARK, the neutrality, correctly
interpreted, is an orientation of the fiscal policy that advises not to intervene in
the competitive mechanisms of the market, there where an almost perfect
competition exists. A stage of perfect competition only turns out to be imaginable
in a juridical order that contemplates the economic freedoms as values to protect3.
In this sense, the principle of neutrality acquires special importance in sectors of
the legal system where the transcendental thing is a free economic action, which
would be raised in transcendental value, and where the application of certain
taxes would disturb this free economic action, especially with regard to the choice
of the territory to carry out the investment. It is especially important the rule of
the neutrality with regard to the European Community law, which is a legal system
of economic freedoms, and which has as aim the protection of the four
fundamental freedoms - free circulation of workers (art. 39 of the constitutive
Treaty of the Economic European Community - EEC Treaty-, after the reform of
the Treaty of Amsterdam, free movement of services (art. 49), ), the right of
establishment (art. 52), and the free movement of capitals (art. 56)4.
2. The neutrality in the European Community Law.
In the European Community Law, neutrality is not a proper principle. It is rather a
general rule, which has the function of an interpretive criterion. And, on the other
hand, it is a rule limited to certain areas of the regulation of the Community.
There are two very clear cases where the neutrality has an important role in the
European Law.
With regard to the operations of restructuring, the Summary of the Directive
90/434/EEC 1990 on the common system of taxation applicable to mergers,
3F., NEUMARK, Principios de la imposición, IEF, Madrid, 1974, pp 316 and 317.
4 EC Treaty.
European Tax Studies 1/2010
© Copyright Seast All rights reserved
3
divisions, transfers of assets and exchanges of shares concerning companies of
different Member States says: the mergers, divisions, transfers of assets and
exchanges of shares concerning companies of different Member States may be
necessary in order to create within the Community conditions analogous to those
of an internal market and in order thus to ensure the establishment and effective
functioning of the common market; whereas such operations ought not to be
hampered by restrictions, disadvantages or distortions arising in particular from
the tax provisions of the Member States5. This neutrality is the one that inspires
the so called regime of tax deferral, that the Directive 90/434/EEC includes as a
fundamental principle in the regulation of the restructuring of companies6.
The Directive 90/434/EEC 1990 establishes a tax benefit. It is a optional regime
for the taxpayer, named regime of tax deferral. This regime supposes that, during
reorganizations, no money should be paid for the capital gains -difference between
the normal value of market of the transmitted elements and the net countable
value, while the transmitted elements are valued by their fair value - that are
generated as consequence of the transmission of goods and rights on the occasion
of the operations of restructuring. These assets will preserve the value that they
had in the company that transmits them. The taxation of capital gains is deferred
until, eventually, the assets are sold7. The Directive establishes a rule of continuity
in the valuation. It imposes the continuity in the determination of the profit and
permits the Members States to allow the companies to assume the losses of the
transferor companies.
In the Official Journal of the European Union of November 25, 2009 the Council
Directive 2009/133/EC of 19 October 2009 on the common system of taxation
applicable to mergers, divisions, partial divisions, transfers of assets and
exchanges of shares concerning companies of different Member States and to the
transfer of the registered office of an SE or SCE between Member States, is
5 Council Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to
mergers, divisions, transfers of assets and exchanges of shares concerning companies of different
Member States.
6 M., NAVARRO EGEA, Fiscalidad de la reestructuración empresarial, Marcial Pons, Madrid, 1997, pp
138 and 139.
7 M.A. CAAMAÑO ANIDO., “Comentarios al régimen jurídico de las operaciones de fusión empresarial
y figuras afines”, Estudios sobre el Impuesto de Sociedades, Yebra-García Novoa-López Díaz, Ed.
Comares, Granada, 1998, p. 342.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT